Table of Contents
Study Materials
Readings
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Special software is required to use some of the files in this section: .xls.
| LEC # | TOPICS | SUBTOPICS | READINGS |
|---|---|---|---|
| 1 | Introduction and Overview of Business Plans Speakers Yonald Chery, Co-Founder of Virtual Ink Joe Hadzima | Introduction to the Business Plan What is it, why do I need it and what is it used for? Practical do's and don'ts in preparing a Business Plan. Things to keep in mind in writing a Business Plan which will improve your chances of obtaining funding and running a successful business. Introduction to Virtual Ink During this course we will be using the Virtual Ink Business Plan as a working example. Yonald Chery, a co-founder of Virtual Ink will introduce the Virtual Ink idea and plan. | In preparation for the class skim through the Virtual Ink Business Plan. Focus on the Executive Summary and the Table of Contents. This is a real plan submitted in the MIT $50K Competition which resulted in a real business which received substantial funding. We will reference this plan throughout the course. |
| 2 | Market Identification and Sales | Market Identification and Sales Many entrepreneurs, especially technology based entrepreneurs, are accused of being too in love with their technology or concept. They rationalize that if they develop a better mousetrap then the product will sell itself. However, a good technology or product idea is a necessary but not a sufficient condition to establishing and growing a successful business venture. Who will buy the product? How will you reach buyers? How much will they pay? If you have an idea for a product or service how do you determine whether there is a market for it? How do you develop a marketing strategy? How do you turn your idea and market research into sales? What do you need to do to convince potential investors that there is a market and that your idea is viable? If you don't have a specific product or service idea but you see a potential need, how do you turn the need into a product or service? This session will discuss these issues and provide guidance on how to approach the marketing section of your business plan. | Moore, Geoffrey A. Crossing the Chasm, Marketing and Selling High-Tech Products to Mainstream Customers. HarperBusiness, 1991. Chapters 1 and 2. Focus on the descriptions of markets in Chapter 2. Review the market and technology sections of the Virtual Ink Plan. |
| 3 | Refining and Presenting your Venture Idea Speakers Terry Heagney, Lecturer, MIT Sloan School of Management Panel Review of Ideas A panel of experienced entrepreneurs will review idea presentations from the class. Sherwin Greenblatt, Director MIT Venture Mentoring Service, former CEO of Bose, Inc. Krisztina Holly, Executive Director MIT Deshpande Center, $50K winner and Serial Entrepreneur | You have an idea. You have some feedback from potential customers. How do you shape the idea and the feedback into a Venture? What are the "credibility testers" which you will have to overcome to attract customers, partners, employees and financing sources? A "credibility tester" is something that, if you can overcome it, people will be convinced of your idea/strategy etc. Is the Technology a "credibility" issue and if so can you/should you develop a simple version of the technology and go after a small market segment with something that proves the technology out? Is the Customer Need the "credibility tester" and if so who do you overcome that concern? Part of this class will be an interactive session with students and others who are in the process of developing a business plan. Presentation Basics How to position and present your idea: strategic presentation skills. | Tiffany, Paul, and Steven Peterson. Chapter 10 "Figuring Out Financials," and chapter 11 "Forecasting and Budgeting." In Business Plans for Dummies. IDG Books Worldwide, Inc. 1997. |
| 4 | Business Plan - Night at the Movies: Technology Strategy, Organization and People Issues Fiona Murray, MIT Sloan School of Management, Class of 1922 Career Development Assistant Professor | Because of scheduling conflicts for some of the faculty and students in the Course, Session 4 will be a "Night at the Movies" in which we play back two important presentations from prior years of the Nuts and Bolts Course. Part 1: "Technology Strategy" - Starring: Professor Fiona Murray Technology Strategy about Value Creation and Value Capture: Value Creation: Does this technology or scientific idea create something of value for customers? Value Capture: Can we capture the economic value inherent in this idea in the face of competition? We will "rebroadcast" Professor Murray's presentation on this topic. Part 2: "It's All About the People" - Starring: Professor Diane Burton Most ventures which fail do so because of people issues, not technology, market or funding issues. What people are needed to take the Business Plan from paper to reality? How do you identify good team members and avoid problems? Building an External Team and an Internal Team. Developing and implementing a philosophy for the business. We will "rebroadcast" Professor Burton's presentation on this topic. | Timmons, Jeffrey A. "The New Venture Team." In New Venture Creation - Entrepreneurship for the 21st Century. New York, NY: McGraw-Hill, 2003, Chapter 7. ISBN: 0072875704. |
| 5 | Business Models and Financial Projections Speakers Business Models: Rich Kivel, MolecularWare, Inc. Building Financial Projections: Charlie Tillett | Business Models You have identified a technology strategy and a market. Now the most important question "How Do You Make Money"? This session will discuss Business Models. What are some common business models and when are they most appropriately used? Financial Projections Armed with an understanding of the market for your products how do you figure out what financial resources you will need to bring a product to that market? This portion of the program will introduce some financial projection techniques based on actual business experience. | Tiffany, Paul, and Steven Peterson. Chapter 10 "Figuring Out Financials," and chapter 11 "Forecasting and Budgeting." In Business Plans for Dummies. IDG Books Worldwide, Inc. 1997. Review the financial projections in the Virtual Ink plan. Manufacturing and Operations Section of Virtual Ink Plan. Financial Statement in Body of Virtual Ink Plan. Detailed Financial Statements in Appendices of Virtual Ink Plan. Download a copy of the Financial Template 2004 for Charlie Tillett's lecture. (XLS) |
| 6 | Pitfalls and Plan Execution | Your Idea is great. You have good feedback from potential customers. You are convinced that your Strategy is correct. So how come you are having trouble raising money or attracting a team or partners? Over and over again entrepreneurs make the same mistakes. Experienced investors, partners, and employees are alert for the pitfalls. Session 6 will discuss these pitfalls, how to recognize them, what to do about them, and how to present a business plan case which alleviates or anticipates these concerns. Among the issues we will discuss are: Legal Issues Identifying and dealing with legal issues in the Business Plan. Securities laws and the Business Plan - How to avoid Going to Jail without passing Go and without Collecting $200. Intellectual Property Law-Patents, Copyrights, Trademarks and Tradesecrets. Major hidden tax traps in starting a business - how to avoid generating phantom income and taxes. General questions and answers on legal issues for the entrepreneur - What you always wanted to know about the law but were afraid to ask/pay for. Understanding Financing Sources Bootstrapping the early stages. Funding from the 3 F's - Friends, Family and Fools. Angels - who are they and what are they looking for? Private placements. Customer financing. Consulting - getting someone else to pay for the development, provide a beta site and endorse your idea. Venture capital. Bank financing. You will learn about the institutional constraints and needs of various funding sources. As a result you will be in a better position to determine if, when and how to approach these sources for financing. | Read Articles from the Boston Business Journal "Starting Up" column: Legal Issues Hadzima, Joe. "Considerations for Founders: Issues in Structuring Relationships Among Members of the Founding Team." (PDF) ———. "Steer Clear of the Tempest: A Start-Up Tragedy in Three Acts." (PDF) ———. "Ten Commandments Of How To Work Effectively With Lawyers." (PDF) ———. "Questions of Copyright: Another Weapon in Property Arsenal." (PDF) ———. "Of Kleenex and Cheez Whiz: Trademarks Are Nothing To Sneeze At." (PDF) ———. "The Importance of Patents: It Pays To Know Patent Regulations." (PDF) Financing Sources Hadzima, Joe. "Thinking About Valuation." (PDF) ———. "Dilution - Here Is A Primer of Stock Vocabulary." (PDF) ———. "All Financing Sources Are Not Equal." (PDF) ———. "What Are the Terms? - Part 1: A Preferred Return." (PDF) ———. "What Are the Terms? - Part 2: Investors Need Some Control After Their Checks Are Cashed." (PDF) ———. "What Are the Terms? - Part 3: Run Don't Walk To The Exit." (PDF) Excerpts from: Venture Support Systems Project: Report on Angel Investors, MIT Entrepreneurship Center, 2000. (PDF) The full report (PDF) (Courtesy of MIT Entrepreneurship Center. Used with permission.) |
| 7 | Forecasting Markets: The Capital Update for 2005 Note: As we did in last year's course we are combining this session with the MIT Enterprise Forum Satellite Broadcast to its 23 chapters located throughout the world. Speakers Produced in association with the MIT Enterprise Forum of Cambridge, "Forecasting Markets: The Capital Update for 2005" is a can't-miss event being broadcast globally to MIT Enterprise Forum chapters and MIT Alumni Clubs. Our panel of experts includes: Moderator Bob Crowley, President of the Massachusetts Technology Development Corporation Daphne Dufresne, a Principal at Weston Presidio Oscar Jazdowski, Senior Relationship Manager for Silicon Valley Bank T. L. Stebbins, Managing Director of the Adams Harkness Investment Banking Group Carol Vallone, President and CEO of WebCT | What do the capital markets have in store for high-tech entrepreneurs this year? Join the MIT Enterprise Forum and a panel of renowned experts as we take an in-depth look at money sources for both growth and start-up companies in 2005. From VCs to investment banks to M&As and IPOs, this provocative program will cover the important money angles your business needs to know for the coming year. About the MIT Enterprise Forum The MIT Enterprise Forum, Inc. builds connections to technology entrepreneurs and to the communities in which they reside. The Enterprise Forum produces a series of educational programs about entrepreneurship through a network of 23 worldwide chapters. Anyone interested in or involved with technology entrepreneurship is welcome to participate and join together to form the Enterprise Forum community. |