Technology Ventures: From Idea to EnterpriseChapter 8: Summary Even if you are on the right track,...

Technology Ventures: From Idea to EnterpriseChapter 8: Summary

Even if you are on the right track, you’ll get run over if you just sit there.

Will Rogers

What forms do new businesses take and what are corporate ventures?

The appropriate legal and organizational format used to organize a new venture will vary according to several factors such as context, people, legal and tax consequences, and cultural norms. New ventures can range from small businesses or consulting services to high-growth, high-potential enterprises. Other organizations start out operating in a niche market and grow into a broader one. An important contrast to these independent ventures is the corporate new venture. It emerges within larger existing enterprises and is granted autonomy so it can fulfill its promise.

Summary

Types of VenturesTypes of Ventures

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Chapter 8: Organizational Forms

Organizational Forms:

•Independent venture: new venture not owned or controlled by an established corporation.

•Corporate venture: new venture started by an existing corporation.

•Nonprofit organization: Corporation, member association, or charitable organization that provides a service but does not earn a profit, nor does it distribute dividends or payments to its employees, donors, or volunteers. Today, these organizations are often called not-for-profit.

•Family-owned: includes two or more members of a family who hold control of the firm.

•Franchise: legal arrangement in which the owner of a business format has licensed it to an individual or local firm, called a franchisee. The franchisor is the organization that owns and operates a firm that controls the business format and its associated trademarks and logo.

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Technology Ventures: From Idea to Enterprise

Chapter 8: Types of New Business Ventures

Types of New Business Ventures:

Small business is a sole proprietorship, a partnership, or a corporation owned by a few people.

Niche business seeks to exploit a limited opportunity or market to provide the entrepreneurs with independence and a slow-growth buildup of the business.

High-growth business aims to build an important new business and requires a significant investment to start up.


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Chapter 8: Types of New Business Ventures

Types of New Business Ventures (continued):

Radical innovation business seeks to commercialize an important new innovation and build an important new business.

Nonprofit organization is a corporation or a member association initiated to serve a social or charitable purpose.

Corporate new venture (CNV) is that started by an existing corporation for the purpose of building an important new business unit as a solely owned subsidiary or a spin-off as a new independent company.


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Chapter 8: Table 8.1

The Five Types of New Ventures



FAMILY BUSINESS

Franchise

Types of franchiseTypes of franchise

Business-format franchise

Trade-name franchise

Product-distribution franchise


Characteristics of Corporate New Ventures


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Chapter 8: Figure 8.3 – Four models of corporate entrepreneurship




1. Identify and screen opportunities. Create a vision. Designate a venture

champion and an entrepreneurial team.

2. Refine the concept and determine feasibility. Prepare the concept and vision

statement. Draft a brief Business Plan Summary or Outline for review and

gathering support.

3. Prepare a complete Business Plan. Identify the person to lead the new venture.

4. Determine the best form of the corporate new venture: internal new venture

unit; spin-out, subsidiary, or internal project.

5. Establish the Corporate New Venture with talent, resources, and capabilities

transferred from the parent company.

The Five-Step Process for Establishing A Corporate New Venture


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Chapter 8: Table 8.12 – Extracting value from corporate venturing


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Extracting value from corporate venturing


Chapter 8: Exercise

A new firm plans to develop and offer a computer design program for creating and machining hip replacement joints. Describe the cluster this firm should locate within. What sources of legitimacy should it focus on? Should it outsource the software programming of its design software product?


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Chapter 8: Principle

An important, vigorous new business venture can emerge from a large firm when afforded the appropriate balance of independence, resources, and people to respond to the opportunity.


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Chapter 8: Venture Challenge

VENTURE CHALLENGE

1)Using table 8.1, describe the specific type of new venture selected by your team.

2)Assuming your venture was developed as a corporate venture, describe the advantages and disadvantages of this approach using table 8.9


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Technology Ventures: From Idea to OpportunityChapter 8: DVD Videos

DVD Videos

“Sustainability for Non-Profit Organizations”

Kavita Ramdas (Global Fund for Women)

“Classes of Innovations in the Product Leadership Zone”

Geoffrey Moore (Mohr Davidow Ventures)


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Technology Ventures: From Idea to EnterpriseChapter 8: Summary Even if you are on the right track,...

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