1. Chapter 1 The Power of Entrepreneurship
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©

2. Definition of entrepreneurship
Schumpeter
An entrepreneur is the person who destroys the existing economic order by introducing new products and services, by introducing new methods of production, by creating new forms of organization, or by exploiting new raw materials.
Simpler
An entrepreneur is the person who perceives an opportunity and creates an organization to pursue it.
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©

3. Bygrave & Zacharakis, 2007. Entrepreneurship, New York: Wiley. ©
Business in the US
99.5% are small
businesses
(with 500 or fewer
employees)
Part-time
employees
24 million
businesses
Full-time
employees
Have only
1 employee
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©

4. 10-year survival rates of business establishments
81 % survive
40 % survive
1 year
5 years
2 years
10 years
65 % survive
25 % survive
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©

5. Entrepreneurship Revolution Strikes Gold
Netscape Communications:
$6 million of own money + $6 million of VC money = $2.2 billion of market
capitalization on the first day of IPO
182% ROI
eBay:
Benchmark Capital’s investment of $5 million in eBay multiplied 1500-fold
in just two years
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©

6. Venture Capital Investments in Internet-related companies
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
'94
'95
'96
'97
'98
'99
'00
'01
'02
'03
'04
Number of Companies $0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Total Invested ($ billion)
Total Invested
eBay IPO
1998
Amazon.com IPO
1997
Yahoo IPO
1996
Netscape IPO
1995
Source: Venture Economics
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©

7. Bygrave & Zacharakis, 2007. Entrepreneurship, New York: Wiley. ©
Rackspace
Founded in 2000
Provides hosting and “cloud computing” services
IPO on August 8
1st venture-backed IPO since March 18
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©

8. Bygrave & Zacharakis, 2007. Entrepreneurship, New York: Wiley. ©
Rackspace since IPO
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©

9. Changes in the Entrepreneurial Framework Conditions
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©

10. Bygrave & Zacharakis, 2007. Entrepreneurship, New York: Wiley. ©
R&D observations
Innovations don’t travel well within university communities without a significant investment in developing networks and marketing concepts
Innovators are rarely entrepreneurs
No one wants to run a business
No one uses the word “opportunity” – they solve problems
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©

11. Informal Investment and Classic Venture Capital Percent of GDP
0.00
0.50
1.00
1.50
2.00
2.50
3.00
Hungary
Finland
Norway
Portugal
Slovenia
France
Ireland UK
Japan
Italy
Belgium
Sweden
Australia
South Africa
Hong Kong
Spain
USA
Germany
Netherlands
Denmark
Canada
Israel
Switzerland
Singapore
Poland
Greece
New Zealand
Informal investment and classic
venture capital as percent of GDP
Classic venture capital
Informal investment
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©

12. Bygrave & Zacharakis, 2007. Entrepreneurship, New York: Wiley. ©
Recent developments
Venture Capital Firms Just Had The Lowest Fund Raising Quarter Since 2003
Facebook, arguably the most famous VC-backed company nowadays
The venture capital industry is getting hit hard by the domino-effect of the turbulent economy and unpredictable market.
A total of 52 venture capital firms raised a combined $1.72 billion in the third quarter
The total is the lowest accumulation of funds since 2003; it is also a 52% drop from the third quarter of which saw 53 firms raise $3.6 billion.
Bygrave & Zacharakis, Entrepreneurship, New York: Wiley. ©