M M M M M M
by J. Chris Leach, Ronald W. Melicher, Chapters 1 - 16,
M M M M M M M M M M M M
Complete With CAPSTONE CASES
M M M M
,TABLE OF CONTENTS
M M M
PartM1:MTHEMENTREPRENEURIALMENVIRONMENT.
1.MIntroductionMtoM
FinanceMforMEntrepreneurs.
2.MDevelopingMtheMBusinessMIdea.
PartM2:MORGANIZINGMANDMOPERATINGMTHEMVENTURE.
3.MOrganizingMandMFinancingMaMNewMVenture.
4.MPreparingMandMUsingMFinancialMStatements.
5.MEvaluatingMOperatingMandMFinancialMPerformance.
PartM3:MPLANNINGMFORMTHEMFUTURE.
6.MManagingMCashMFlow.
7.MTypesMandMCostsMofMFinancialMCapital.
8.MSecuritiesMLawMConsiderationsMWhenMObtainingMVentureMFinancing.
PartM4:MCREATINGMANDMRECOGNIZINGMVENTUREMVALUE.
9.MProjectingMFinancialMStatements.
10.MValuingMEarly-StageMVentures.
11.MVentureMCapitalMValuationMMethods.
PartM5:MSTRUCTURINGMFINANCINGMFORMTHEMGROWINGMVENTURE.
12.MProfessionalMVentureMCapital.
13.MOtherMFinancingMAlternatives.
14.MSecurityMStructuresMandMDeterminingMEnterpriseMValues.
PartM6:MEXITMANDMTURNAROUNDMSTRATEGIES.
15.MHarvestingMtheMBusinessMVentureMInvestment.
16.MFinanciallyMTroubledMVentures:MTurnaroundMOpportunities?
PartM7:MCAPSTONEMCASES.
CaseM1.MEco-Products,MInc.
CaseM2.MSpatialMTechnology,M
,Chapter 1 M
INTRODUCTIONMTOMFINANCEMFORMENTREPRENEURS
FOCUS
TheMpurposeMofMthisMfirstMchapterMisMtoMpresentManMoverviewMofMwhatMentrepreneurialMfinanceMisMabout.MI
nMdoingMsoMweMhopeMtoMconveyMtoMyouMtheMimportanceMofMunderstandingMandMapplyingMentrepreneurialMf
inanceMmethodsMandMtoolsMtoMhelpMensureManMentrepreneurialMventureMisMsuccessful.MWeMpresentMaMlifeMcy
cleMapproachMtoMtheMteachingMofMentrepreneurialMfinanceMwhereMweMcoverMventureMoperatingMandMfinanci
alMdecisionsMfacedMbyMtheMentrepreneurMasMaMventureMprogressesMfromManMideaMthroughMtoMharvestingMthe
Mventure.
LEARNINGMOBJECTIVES
LOM1.1:MCharacterizeMtheMentrepreneurialMprocess.
LOM1.2:MDescribeMentrepreneurshipMandMsomeMcharacteristicsMofMentrepreneurs.
LOM1.3:MIndicateMseveralMmegatrendsMprovidingMwavesMofMentrepreneurialMopportunities.MLOM
1.4:MListMandMdescribeMtheMsevenMprinciplesMofMentrepreneurialMfinance.
LOM1.5:MDiscussMentrepreneurialMfinanceMandMtheMroleMofMtheMfinancialMmanager.ML
OM1.6:MDescribeMtheMvariousMstagesMofMaMsuccessfulMventure‘sMlifeMcycle.
LOM1.7:MIdentify,MbyMlifeMcycleMstage,MtheMrelevantMtypesMofMfinancingMandMinvestors.ML
OM1.8:MUnderstandMtheMlifeMcycleMapproachMusedMinMthisMbook.
CHAPTERMOUTLINE
1.1 THEMENTREPRENEURIALMPROCESS
1.2 ENTREPRENEURSHIPMFUNDAMENTALS
A. WhoMisManMEntrepreneur?
B. BasicMDefinitions
C. EntrepreneurialMTraitsMorMCharacteristics
D. OpportunitiesMExistMButMNotMWithoutMRisks
1.3 SOURCESMOFMENTREPRENEURIALMOPPORTUNITIES
A. SocietalMChanges
B. DemographicMChanges
C. TechnologicalMChanges
D. EmergingMEconomiesMandMGlobalMChanges
E. CrisesMandM―Bubbles‖
F. DisruptiveMInnovation
1
, 1.4 PRINCIPLESMOFMENTREPRENEURIALMFINANCE
A. Real,MHuman,MandMFinancialMCapitalMmustMbeMRentedMfromMOwnersM(PrincipleM#1)
B. RiskMandMExpectedMRewardMgoMHandMinMHandM(PrincipleM#2)
C. WhileMAccountingMisMtheMLanguageMofMBusiness,MCashMisMtheMCurrencyM(PrincipleM#3)
D. NewMVentureMFinancingMInvolvesMSearch,MNegotiation,MandMPrivacyM(PrincipleM#4)
E. AMVenture‘sMFinancialMObjectiveMisMtoMIncreaseMValueM(PrincipleM#5)
F. ItMisMDangerousMtoMAssumeMthatMPeopleMActMAgainstMTheirMOwnMSelf-
InterestsM(PrincipleM#6)
G. VentureMCharacterMandMReputationMcanMbeMAssetsMorMLiabilitiesM(PrincipleM#7)
1.5 ROLEMOFMENTREPRENEURIALMFINANCE
1.6 THEMSUCCESSFULMVENTUREMLIFEMCYCLE
A. DevelopmentMStage
B. StartupMStage
C. SurvivalMStage
D. Rapid-GrowthMStage
E. Early-MaturityMStage
F. LifeMCycleMStagesMandMtheMEntrepreneurialMProcess
1.7 FINANCINGMTHROUGHMTHEMVENTUREMLIFEMCYCLE
A. SeedMFinancing
B. StartupMFinancing
C. First-RoundMFinancing
D. Second-RoundMFinancing
E. MezzanineMFinancing
F. Liquidity-StageMFinancing
G. SeasonedMFinancing
1.8 LIFEMCYCLEMAPPROACHMFORMTEACHINGMENTREPRENEURIALMFINANCEMSUMM
ARY
DISCUSSIONMQUESTIONSMANDMANSWERS
1. WhatMisMtheMentrepreneurialMprocess?
TheMentrepreneurialMprocessMcomprises:MdevelopingMopportunities,MgatheringMresources,MandMmana
gingMandMbuildingMoperationsMwithMtheMgoalMofMcreatingMvalue.
2. WhatMisMentrepreneurship?MWhatMareMsomeMbasicMcharacteristicsMofMentrepreneurs?
EntrepreneurshipMisMtheMprocessMofMchangingMideasMintoMcommercialMopportunitiesMandMcreatingMvalue
.M WhileMthereMisMnoMprototypicalMentrepreneur,MmanyMareMgoodMatMrecognizingMcommercialMopport
unities,MtendMtoMbeMoptimistic,MandMenvisionMaMplanMforMtheMfuture.
3. WhyMdoMbusinessesMcloseMorMceaseMoperating?MWhatMareMtheMprimaryMreasonsMwhyMbusinessesMfail?