Technology Ventures From Idea To Enterprise 4th Edition Thomas Byers - Solutions

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1.6 Given an understanding of the waves of innovation throughout history (Figure 1.5), explore opportunities that are created in a wave after the peak. For example, how can an entrepreneur take advantage of a mature or declining market?
1.5 Research the number of companies that either had an IPO (initial public offering) or have been acquired in the last five years. What industries were these companies in? Where is the number of IPOs vs. M&As (mergers and acquisitions) trend leading? What implications does this have on the number
1.4 Name a successful entrepreneurial team you personally admire.How would you classify it in the context of the entrepreneur capabilities shown in Table 1.4? Do these elements of entrepreneurship apply to it?
1.3 Name an entrepreneur that you personally admire. Why do you consider this person to be an entrepreneur? What sets him or her apart from other business leaders? What path did this person take to entrepreneurship? What personal sacrifices or investments did this person make in the journey? What
1.2 Consider opportunities that have occurred to you over the past month and list them in a column. Then, describe your strong interests and passions, and list them in a second column. Finally, create a list of your capabilities in a third column. Is there a natural match of opportunity, interests,
1.1 What is the difference between an idea and an opportunity? Why is this difference important to entrepreneurs?
Select an example of a white-collar (business) crime in the technology industry and describe what happened. How could this crime have been avoided?
You attend a critical partner meeting with your CEO. After the meeting, your CEO misrepresents the results of the meeting to the broader management team to further a different agenda. How do you handle this situation with your CEO? With your other team members?
Your new firm is considering offering one of two health benefit options.One is more complete but also more costly than the other. Should you ask your employees to accept the lower-cost option? Should you explain the benefits of both plans? If you do, most people will prefer the better plan.What
Your cash-strapped company is bidding for a badly needed contract. As the bid deadline nears, an employee of your nearest competitor pays you a visit. He says he will provide details of your competitor’s bid in return for the promise of a job in six months, after the dust has settled. You know
Southeby’s and Christie’s are the two largest upscale auction houses. Both enjoyed a growing business in the boom years of the late 1990s. In 2000, both firms were accused of price fixing. The Sherman Antitrust Act was passed in 1890 to control the power of trusts and monopolists. In 1995, both
Your emerging new company is selling a high-priced software system to the oil and gas industry. Each sale amounts to $100,000 or more.Your firm is scheduled to deliver a system next week to one of your best customers. However, your chief technical officer has just told you that they have found a
The global financial crisis in 2007–2010 drastically impacted the spending patterns of many businesses and industries. Select an industry, list specific spending changes that occurred during this period, and describe how a start-up selling into this industry should adapt its strategies to account
In May 2003, Zipcar of Boston decided it was time to bring in new funding to reach profitability (www.zipcar.com). However, the willing investors insisted on replacing the CEO and the board of directors.Examine Zipcar’s subsequent progress in terms of execution and need at different stages of the
Why is it critical that the investor and the entrepreneur are both happy with the final deal? Who loses if this is not the case?
What deal terms can a venture capitalist suggest to ensure entrepreneur incentives are aligned in both good and bad times for the firm? What are deal terms an entrepreneur would suggest to ensure investor incentive alignment in both good and bad times for the firm?
What are the key factors a venture capitalist uses to value a new venture?Describe what value parameters are most likely different between an investor and an entrepreneur.
What is a term sheet? Specify three items in the term sheet that you would want as an entrepreneur. Specify item clauses in the term sheet that you would want as a venture capitalist. Why is it important for both parties to be happy with the resulting deal?
As the CEO of a new technology venture, you and your team have set a valuation for your firm of $10 million (pre-money) and found a willing venture capital firm. The venture capital firm, however, has set a valuation of $6 million. Revenues next year are projected to be about $6 million, and the
Business plan contests offer an opportunity for entrepreneurs to present their business plans. The Clean Tech Open in the United States offers one such contest (www2.cleantechopen.org). Visit the site, study the description of the winners, and prepare a brief report on an enterprise that most
In what types of ventures and circumstances could grants be viewed as an especially attractive source of capital? When would a grant be less appropriate?
Explain the purpose and value of staged financing (a) for investors and(b) for the entrepreneur(s).
Consider a new firm in the nanotechnology field that seeks a second round of financing. This year, it has revenues of $2 million and projects profitability of $200,000 next year on revenues of $3 million. It is raising$1 million from a new set of investors. What share of the company should it offer
The CEO of an early-stage software company is seeking $5 million from venture capitalists. The reasonable projected net income of $5 million in year 5 can be valued at a PE of 20. Furthermore, the sales in year 5 are projected at $25 million. Assuming no dilution from additional financings, what
DGI, a new firm in formation, has developed a set of projections shown in Table 18.19. The expected and pessimistic cases are shown. The harvest of the firm is planned for the fifth year. The firm is seeking an initial investment of $1 million before launching in year 1 as well as a commitment for
Glenn Owens’ attractive technology start-up requires $10 million to launch. Projections show earnings of $10 million and sales of $80 million in the fifth year. The venture capital firm expects a return of 50 percent per year for the five-year period prior to an IPO. What valuation would you
Viscotech Inc. is described in exercise 17.3. Determine the percentage ownership an angel group may demand for investing the $1 million sought by Viscotech at the start of year 1. If Viscotech is unable to obtain the bank loan of $500,000, it will need an equity investment of $1.5 million. What
Reconsider the firm described in exercise 17.6 when it is determined that fixed costs have declined to $30,000 and the firm has determined by studies that it can only expect to sell 60 units this year. What price should it select to ensure selling the 60 units profitably?
Continuing exercise 17.6, Sensor International sells 300,000 packages in its first year and 400,000 in its second. If the investor’s original investment was $100,000, determine the return on investment in year 1 and year 2 for the firm. Assume a tax rate of 20 percent.
A new firm, Sensor International, is preparing a plan based on its new device to be used in a security network. The cost of manufacturing, marketing, and distributing a package of six sensors is 14 cents, and the price to the distributor is 68 cents. The firm calculates its one-time fixed costs at
A software firm has fixed costs of $800,000 and variable costs of$12 per unit. Calculate the breakeven quantity (Q) when each unit sells for $50. If the firm sells 50,000 units in a year, what is its profit for that year? Assume the tax rate for the firm is 20 percent.
A new venture is launched with an initial investment (cash on hand) of$80,000. It generates sales of $40,000 each month. It has monthly operating costs of $36,000. The firm purchases equipment costing $30,000 each month for the first 4 months. Calculate the return on investment at the end of 12
Viscotech, Inc. is planning to enter the field of electro-optical systems for automated optical inspection and detection of defects in manufacturing components and modules. The projected financial revenues and income are shown in Table 17.9. The firm plans to start with an equity investment
Examples of revenue models are listed in Table 16.1. Select three of these revenue models and explain the challenges in creating sales projections for each.
Define the interrelationships between an income statement, balance sheet, and cash flow statement. Which one is most important for a new venture and why?
Compare the most recent yearly income statements for Microsoft, Apple, Dell, Sony, and Qualcomm. Examine the gross margins for each of these companies (cost of goods sold divided by revenue).Complete a similar ratio analysis against Sales, General &Administrative (SG&A) and Research & Development
Research and determine the most profitable industry sector in a country of interest (profitability on either a relative or absolute basis). What is driving this high profitability? Is it sustainable, and for how long?
Salesforce.com sells software as a service delivered online. Corporations pay about $60 per month for each user (www.salesforce.com). Describe its revenue model and profit model.
Skype offers Voice over Internet Protocol (VoIP) telephony services and PC to PC calling. The telephone service began as a free service.Describe the revenue and profit model for Skype specifically. Has its acquisition by Microsoft changed Skype’s revenue model?
Zipcar gives its members short-term, on-demand use of a fleet of cars (www.zipcar.com). Before launching this service, Zipcar proposed a pricing scheme of a $300 refundable security deposit, a $300 annual subscription fee, and $1.50 per hour plus 40 cents per mile. Create another pricing scheme
Google uses a complex revenue model and a related profit engine. It has a large base of users and advertisers, and works to link its users to retailers.Describe its revenue and profit model. Contrast this with Yahoo’s revenue model. Examining recent quarterly reports will give an indication of
A company’s value chain was discussed in Section 14.1. Figure 16.1 outlines the division between profit and cost. Extend Figure 16.1 to account for the profits and costs of partners and suppliers in a company’s value chain.
When Google initially expanded search services into China, there was surprise over Google’s decision to censor some content per requests by the Chinese government. Why did some view this as “evil”? How did Google view the concern? What are other challenges facing companies expanding into
Interview a technology executive based in a country different from the company’s headquarters. How are various company functions handled(e.g., marketing, sales, operations, development)? What are the key challenges of operating away from company headquarters?
Identify a technology-based company that used acquisition to enter into an international market. Describe the strategic alignment and the executed deal terms. Was it a success? What were the key challenges that arose?
Describe how the acquisition strategies of these firms have differed:Apple, Google, Microsoft, Oracle, and Qualcomm.
A software firm is available for purchase, but it has experienced no growth for several years. The firm provides a cash return annually before taxes and owner’s salary of $100,000. It has annual sales of$1 million. As a purchaser of this firm, you select a discount rate of 14 percent. Calculate
An acquirer looks for a company with a good profit margin, a proven history, and a fair price. Choose an industry of interest and list five criteria for selecting candidates for acquisition.
Describe and contrast the operational challenges faced by the following start-ups: (a) new drug discovery company, (b) medical device company, and (c) biofuel company.
Describe and contrast the operational challenges faced by the following start-ups: (a) consumer Web services start-up, (b) iPhone application company, and (c) electronic device company.
About 5 to 10 percent of pharmaceuticals produced do not meet specifications and have to be reworked or discarded. Quality testing is done by hand, and the batch process method is widely used. A new venture has been launched to design new processes for drug makers. What new methods and approaches
The use of a new technology can bring new life to a mature industry such as the plastics industry. Logistics, supply-chain, and scheduling software enable large productivity increases in several mature manufacturing industries. Examples of such software firms are i2, Moldflow, Quad, and Keane.
China is a world-class manufacturer and has advantages of size, scale and cost. Identify a Chinese assembler of electronic products for European companies. What advantages does China have versus manufacturing in Europe?
Flextronics manufactures products for many electronic companies(www.flextronics.com). It is a global company, headquartered in Singapore, and has over 176,000 employees. The company’s core competence is lean manufacturing. Where does Flextronix fit in the value web for Microsoft, Ericsson, and
Select a start-up of your choice. Using the format of Figure 14.6, prepare a value web diagram for this company.
There is a strong trend in many information technology fields of outsourcing to another country and continent. What are the primary motivations for this movement? How and why are start-ups participating in this trend? What are some of the risks for a new enterprise considering outsourcing?
Identify a local start-up company (or select one from another part of the world). Does this company operate in a specific industrial cluster? What local resources or local advantages does the company leverage? Why is the company located where it is?
Four of the most popular U.S. locations for technology firms are Boston, the San Francisco Bay area, Austin, and Seattle. Using Table 13.3, determine the most attractive location for an orthopedic medical devices start-up. Do the same for a clean tech start-up.
Determine who is or was one of the most persuasive people you have known. Using Table 13.2, describe how this person exercised his or her sources of legitimacy.
In 2005, Google released Google Earth and the Google Map APIs. Google brought compelling mapping and visualization functions within reach of all Web developers. In 2006, Amazon released a grid storage Web service called S3 that stands for Simple Storage Service. Amazon positions the service as a
Examine Google’s corporate philosophy “Ten things Google has found to be true” (www.google.com/corporate/tenthings.html). What does Google’s “do no evil” phrase mean? How are these broad truth statements translated into action within the Google organization and culture?
24/7 Customer provides services to U.S. firms that wish to outsource call centers and CRM activities to India. Using the information provided at the firm’s website, describe the founding team of this firm. Also, describe its organizational design (www.247customer.com).
Red Hat is the leading distributor of Linux software and services. The firm had over 4,500 employees and revenues of $1.3 billion in fiscal year 2012. Using the concepts of Section 12.6, describe the firm’s organizational culture.
Take-Two Interactive (www.take2games.com) develops entertainment software games. Revenues grew from $19 million in 1997 to $1.5 billion in 2008. Describe the organizational design for Take-Two, which has about 2,100 employees. Use Figure 12.1 to help determine its organizational model.
Genentech (www.gene.com) has a unique culture known for rigorous science, guarding of industry secrets, and rigid rules. Its key principle is: good scientists make for good science make for good products make for a good company. Describe Genentech’s culture in terms of norms and rituals.
Examine the beginnings of a technology venture that currently has lots of “buzz”. Who were the company founders? What background, capabilities, and qualities did each bring to his or her new role? Who was hired next and why?
In 2012, Apple and Samsung engaged in a prolonged patent fight.Describe Samsung’s product offerings and what Apple patents they may have been violating. How did Samsung address the patent challenge?
Mayo Clinic has filed an application for a broad method patent that gives it control over a new generation of treatments for chronic sinus inflammation (sinusitis). The patent, in effect, blocks others from selling an antifungal agent to treat the condition without Mayo’s approval.Mayo will soon
Describe the advantages and disadvantages of a company name representing more than just a company name (e.g., Xerox, Kleenex, and Google).
Apple Inc. and Apple Corps have had trademark disputes over the use of the name Apple associated with the music business. Apple Inc. has a thriving iPod and online music store. Apple Corps is a multiarmed multimedia company formed by the Beatles in 1968, consisting of the following subsidiaries:
The three founders of the new firm described in exercise 11.1 are looking for a name for their firm. One idea is Advanced Nanoscience &Technology. Another is Nanoscience Applications. What do you think of these names? Can you suggest a better name?
Three friends have decided to form a firm to design and manufacture nanotechnology devices for medical applications. Michael Rogers has worked for Hewlett-Packard for 12 years and on his own has designed and submitted a patent claim for a nanotechnology manufacturing technology.Steve Allegro, a
Describe the investment philosophy of a corporate venture capital firm such as Intel Capital, SAP Ventures, Eli Lilly, Google Ventures, Dow Corporate Venture Capital, or General Electric (GE) Equity. How are they synergistic with their parent companies’ strategic direction?
Many new clean tech ventures have relied on funding and partnership from established corporations. Select a recently funded clean tech venture with corporate venture involvement. Did the funding impact the structure of the new venture? What does the new venture expect to gain from the backing by
The traditional newspaper industry is in a declining phase and much has been written on how newspapers should reinvent themselves. How are various newspaper organizations addressing this challenge? What is the best next step in the newspaper industry? See Figure 10.6 for potential options.
Zimmer Holdings (www.zimmer.com) was incorporated in January 2001 as a wholly owned subsidiary and CNV of Bristol-Meyers Squibb Company. Zimmer designs and markets orthopedic and surgical products.The subsidiary was created from its parent in August 2001, with shareholders receiving 1 share of
A partnership between a social entrepreneurship course at Stanford University and the nonprofit Light Up the World Foundation (www.lutw.org) worked to bring safe, affordable lighting to people in Mexico, China, and India. Students in engineering and business worked to design a lamp appropriate to
Research the number of new ventures created in the last year. Try to segment the data you collect into the venture types outlined in Table 10.3. Compare the number of new ventures of each type. What growth rates have different venture types exhibited? Can this be explained by broader economic
Identify a high-tech firm that uses an indirect sales channel model. What is the model used? Why was the indirect sales model chosen for its particular products or services?
to describe where the market response to HDTV has been to date and how long adoption has taken for each group.
HDTV is an emerging consumer electronic technology. Discuss the marketing challenges associated with HDTV (e.g., building an ecosystem of content, players, and content distribution). How do you see this influenced by (a) competing with DVD (the last technology generation) and (b) emerging
Powerful brands are built on innovativeness and advertising. Examine the brand value for Genentech, Merck, and Apple, and describe the reasons for their brand power.
BusinessWeek with Interbrand conducts an annual worldwide brand survey ranking the top 100 global brands. Examine the most recent survey and choose a new entrant to the list. Describe that company’s marketing objectives and customer target segments.
Facebook and Twitter are rapidly growing social networking sites based in the United States but with global reach. Prepare a positioning map for these two firms.
What is viral marketing? Provide an example of a start-up using viral marketing to promote and sell its product or service. Why does it work(or not work)?
With the explosion of mobile handsets worldwide, many marketing and advertising firms are looking at how to take advantage of the ubiquity of a communications device carried everywhere. Describe why marketers view the mobile handset as such a valuable marketing platform. What types of mobile
There continues to be a disparity between the advertising dollars spent on reaching TV viewers and Internet users versus the amount of time that is spent interacting with each media. A large degree of Google’s success is attributable to taking advantage of this large gap. Research to determine
An IEEE Spectrum magazine article in September 2005(www. spectrum.ieee.org/sep05/1685) featured some of the most expensive software failures ever. Examine the “Software Hall of Shame” and select your favorite. Describe why failure of knowledge management and the lack of behaving as a learning
A number of software development methodologies exist to encourage rapid design and implementation (e.g., agile software development, extreme programming, etc.). Select two of these methodologies and compare and contrast the specific product design and development processes each is attempting to
The advantages of the Web as a distribution platform delivering services and content are well-known. Describe a few examples of its impact on product prototyping and product design and development.
Capstone Turbine is a developer, assembler, and supplier of microturbine technology. Its primary customers are in the on-site power production and hybrid-electric car markets (www.capstoneturbine.com). Using the format of Figure 8.6, describe a scenario for the growth of Capstone over the next five
What role should the “end customer” have in the product design and development process? Do customers always know what they want?
How might you influence innovation in a company using each of the six parts of the Innovation Engine from Figure 8.2?
Section 5.1 discussed the first mover’s versus follower’s approaches.How does the importance of this decision change in a market with network effects and increasing returns?
Describe how social and professional networking sites such as Facebook, Twitter, or Linkedin have leveraged network effects to expand.
The timing of the first revenue or customer shipment is an important milestone for any start-up. Research the average time until first revenue for Internet, biotech, and clean tech companies. If you were an investor in these three types of businesses, how would this impact your view of these
Verify the empirical validity of Figure 7.9. Research the following questions using your favorite finance website or newspaper. What was the previous year’s risk-free T-bill rate? What rate of return has the S&P 500 generated over the last year? Select a start-up that recently has gone public and
A new entrepreneur is relatively risk-averse with a risk-adjusted constantλ 5 2. Her opportunity cost is $100,000 before earning a regular salary from the venture in its second year. She also invests her savings of $50,000. Calculate the minimum annual return that will be acceptable to her in the
An investor is asked to invest $10,000 in a new venture today. The expected return in three years is $28,000 with a probability of occurrence of 70 percent. Would you recommend this investment? Describe your reasoning.
Select a well-known start-up or one that personally interests you. Use the sources of uncertainty outlined in Table 7.2 to discuss three key risk areas for that company in the immediate future. Find a recent article about the company and list which risks are discussed in that article.

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Technology Ventures From Idea To Enterprise 4th Edition Thomas Byers - Solutions

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