E mpowering I magination A pplying K nowledge E xploring I nnovations T omorrow S eizing O pportunities A ccelerating B usiness I nspiring I nnovations E mpowering I magination A pplying Knowledge Explore S eizing O pportunities A ccelerating B usiness I nspiring T omorrow E mpowering I magination A pplying K nowledge E xploring Innovation T omorrow S eizing O pportunities A ccelerating Business I nspiring T Opportunity Recognition and Idea Evaluation

Opportunity Recognition  Discuss: What is the difference between an opportunity and an idea?

Opportunity Recognition Driving Forces of Value Creation:  Opportunity driven  Entrepreneur and team  Fit and balance  Integrated and holistic

Opportunity Recognition Opportunity Driven: What makes a good opportunity?  Opportunity driven  Entrepreneur and team  Fit and balance  Integrated and holistic

Opportunity Recognition Opportunity Evaluations:  Market size and growth potential  Technology  Personnel and team  Product value/characteristics  Internal challenges  Level of innovation and creativity

Opportunity Recognition Maximize Potential with Limited Resources  Clear, concise description of the business  Unique features and proprietary rights  Overview of market potential  Strong team  Financial potential

Opportunity Recognition The Product/Service Plan  Bootstrapping (Barter, borrow, beg)  Minimize and control resources versus owning resources, such as equipment, buildings, other… Thinking money first can be a mistake.

Opportunity Recognition Fit and Balance:  Balancing Opportunity, and Resources to create a successful venture.

Opportunity Recognition Opportunity Resources Business Plan

Opportunity Recognition Opportunity  Market Demand  Market Structure & Size  Margin Analysis

Opportunity Recognition Resources  Minimize & Control vs. Maximize & Own  Financial  People

Opportunity Recognition Criteria:  Customers  Growth rate  User benefits  Capacity  Value added  Attainable Share  Product life  Cost structure  Structure  Size Evaluating Venture Opportunities Industry and Market

Opportunity Recognition Criteria:  Time to BE  ROI potential  Exit strategy  Cash flow characteristics BE = Break Even ROI = Return on Investment  Capital market  Capital requirements  Value-added potential Evaluating Venture Opportunities Economics and Harvest Issues

Opportunity Recognition Criteria:  Fixed/variable costs  Control over costs  Proprietary protection  Contracts/networks  Response/lead time  Legal advantage Evaluating Venture Opportunities Competitive Advantages

Opportunity Recognition Criteria:  Entrepreneurial Team  Industry and technical experience  Integrity  Intellectual honesty Evaluating Venture Opportunities Management Team

Opportunity Recognitions Evaluating Venture Opportunities Personal Criteria  Goals and fit  Upside/downside issues  Opportunity costs  Desirability  Risk/reward tolerance  Stress tolerance

Opportunity Recognition Venture Opportunities 1. They create or add significant value to a customer or end user. 2. They do so by solving a significant problem, or meeting a significant want or need, for which someone is willing to pay a premium.

Opportunity Recognition 3. They have a robust market, margin, and moneymaking characteristics: large with high growth; high margins; early free cash flow; and attractive returns to investors. 4. They are a good fit with the founders and management team.