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Barringer Chapter 1 Powerpoint
Barringer Chapter 1 Powerpoint
Introduction to
Entrepreneurship
Bruce R. Barringer
R. Duane Ireland
Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall
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Introduction to Entrepreneurship
There is tremendous
interest in
entrepreneurship in the
U.S. and around the world.
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College Courses
In 1985, there were about 250 entrepreneurship courses
offered across all colleges in the United States.
Today, more than 2,000 colleges and universities in the
United States (which is about two-thirds of the total) offer
at least one course in entrepreneurship.
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What is Entrepreneurship?
Academic Definition (Stevenson & Jarillo)
Entrepreneurship is the process by which individuals pursue
opportunities without regard to resources they currently
control.
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Corporate Entrepreneurship
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Corporate Entrepreneurship
Is the conceptualization of entrepreneurship at the firm
level.
All firms fall along a conceptual continuum that ranges
from highly conservative to highly entrepreneurial.
The position of a firm on this continuum is referred to as its
entrepreneurial intensity.
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Corporate Entrepreneurship
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Entrepreneurial Firms
Proactive
Innovative
Risk taking
Conservative Firms
Take a more wait and see
posture
Less innovative
Risk averse
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Product/Customer Focus
A second defining characteristic of successful entrepreneurs
is a product/customer focus.
An entrepreneurs keen focus on products and customers
typically stems from the fact that most entrepreneurs are, at
heart, craftspeople.
Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall
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Execution Intelligence
The ability to fashion a solid business idea into a viable
business is a key characteristic of successful entrepreneurs.
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Optimistic disposition
A networker
Persuasive
Achievement motivated
Promoter
Alert to opportunities
Resource assembler/leverager
Creative
Self-confident
Decisive
Self-starter
Energetic
Tenacious
Tolerant of ambiguity
Visionary
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Women Entrepreneurs
There were 6.2 million womenowned businesses in 2002 (the
most recent statistics available)
This number was up 20% from
1997.
There are a growing number of
organizations that support and
advocate for women-owned
businesses.
Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall
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Minority Entrepreneurs
There has been a substantial
increase in minority
entrepreneurs in the U.S. from
1996 to 2010.
The biggest jump has come in
Latino entrepreneurs, which
increased from 11% to 23%
from 1996 to 2010.
Senior Entrepreneurs
The percentage of U.S.
entrepreneurs who are seniors
jumped from 15% to 23% from
1996 to 2010.
The increase is attributed to
corporate downsizing, a desire
among older workers for more
fulfillment in their lives, a need
for additional income, and
similar factors.
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Young Entrepreneurs
Interest among young people in entrepreneurial careers
is high.
According to a Harris Interactive survey, 40% of people eight
to 21 years old said theyd like to start their own business
someday.
A total of 59% of the 8- to 21- year olds said they know
someone who has started their own business.
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Job Creation
Small businesses are the creators of most new jobs in the U.S.,
and employ half of all private sector employees.
According to a Kauffman Foundation survey, 92% of
Americans say entrepreneurs are critically important to job
creation.
Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall
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Venture Capital
Business Angels
Initial Public
Offerings
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Business Angels
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Business Angels
Are individuals who invest their personal capital directly in
start-ups.
The prototypical business angel is about 50 years old, has
high income and wealth, is well educated, has succeeded as
an entrepreneur, and is interested in the startup process.
The number of angel investors in the U.S. has increased
dramatically over the past decade.
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Business Angels
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Venture Capital
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Venture Capital
Is money that is invested by venture-capital firms in start-ups
and small businesses with exceptional growth potential.
There are about 650 venture-capital firms in the U.S. that
provide funding to about 2,600 firms per year.
Venture-capital firms are limited partnerships of money managers
who raise money in funds to invest in start-ups and growing firms.
The funds, or pool of money, are raised from wealthy individuals,
pension plans, university endowments, foreign investors, and similar
sources.
A typical fund is $75 million to $200 million and invests in 20 to 30
companies over a three- to five-year period.
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Venture Capital
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Venture Capital
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Reason 2
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Reason 4
Creates a form of
currency that can be
used to grow the
company via
acquisitions.
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Commercial
Banks
SBA Guaranteed
Loans
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Commercial Banks
Banks
Historically, commercial banks have not been viewed as a
practical sources of financing for start-up firms.
This sentiment is not a knock against banks; it is just that
banks are risk adverse, and financing start-ups is a risky
business.
Banks are interested in firms that have a strong cash flow, low
leverage, audited financials, good management, and a healthy
balance sheet.
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