Entrepreneurship and new Firm Creation

Entrepreneurship and New Firm Creation

Course Outline
Fall 2016

A: Mondays, 2:30- 5:30pm, beginning Sept 12, in S126

U: Mondays, 7:00-10:00pm, beginning Sept 12, in E112

Instructor

Yuval Deutsch, PhD

N305A
416-736-2100 ext.77895
ydeutsch@schulich.yorku.ca

Assistant

Clara Kan
N305A
416-736-2100 ext.77960
ckan@schulich.yorku.ca

Yuval Deutsch research is published in top journals such as Management Science, Strategic
Management Journal, and MIT Sloan Management Review. He is the winner of the Schulich
Research Fellowship Award 2014 & 2005, and was nominated for the Schulich teaching
excellence award in 2013, 2012, 2005 and 2004. Yuval has extensive industry experience as
a manager, consultant, and accountant.

Brief Description
This course explores various dimensions of the creation of new ventures, including family
enterprises. It is concerned with content and process questions as well as with formulation
and implementation issues that relate to conceptualizing, developing and managing
successful new ventures. The course examines the nature of entrepreneurs and what they
do. It identifies the nature of opportunities and considers how new venture ideas can
successfully be screened. The course provides the opportunity to develop a cohesive and
effective business plan for a start-up venture.

Prerequisites: All 5000-series Required Foundations of Management Core Courses

Contents

Course Learning Outcomes........................................................................................ 2

Deliverables at a Glance............................................................................................. 2
Course Material.......................................................................................................... 3
Student Preparation for Class and Class Participation: Expectations..........................3
Class-by-Class Syllabus.............................................................................................. 3
Written Assignments/Projects: Descriptions ..............................................................7
Evaluation of Written Assignments/Projects ..............................................................8
Calculation of Course Grade....................................................................................... 9
General Academic Policies: Grading, Academic Honesty, Accommodations and
Exams......................................................................................................................... 9
Quick Reference: Summary of Classes, Activities and Deliverables.........................10

<ENTR 6605> p. 2

Course Learning Outcomes

The purpose of this course is to explore various dimensions of new venture creation. We will
be concerned with content and process questions as well as with formulation and
implementation issues that relate to conceptualizing, developing and managing successful
new ventures. Questions that will be addressed include:

Who are entrepreneurs? What do they do?

What is an opportunity?

How to effectively screen venture ideas?

How to prepare a cohesive, and effective Business Plan (BP)

As an aid to deciding whether to go ahead

As a means for obtaining financing and other critical resources

As a tool for monitoring and controlling the growth of the venture

How to formulate the venture's business strategy?

How to assess the potential viability of a new venture?

How, when, how much, and what type of financing to raise?

How to craft the deal with potential investors?

How can the value created be harvested?

How to manage the risk?

Deliverables at a Glance
Assignment/Task

Quanti
ty
1

%
Weight
2

Elevator pitch (2nd class)

Class participation

1
1

6
10

6
10

New venture concept

Written BP
Final presentation BP
Comments and questions of VC team
Written case reports
Case presentation

1
1
1
1
3
1

10
25
15
10
4
10

10
25
15
10
12
10
100%

Self-introduction (1st class)

Total
%
2

Author
Individ
ual
Individual
Individ
ual
Group
Group
Group
Group
Group
Group

For details, see Written Assignments/Projects: Descriptions (p. 7) and Evaluation

of Written Assignments/Projects (p. 8).

<ENTR 6605> p. 3

Course Material
Spinelli, Ensign, & Adams New Venture Creation 2014 Second Canadian Edition McGraw-Hill
Ryerson Higher Education.
Optional eBook through Connect Online Access at
http://www.mheducation.ca/highereducation/products/9781259065804/
A package of the required case studies and additional reading has been prepared to
supplement the required text. The materials have been assembled into a course kit.
Course kits are available for purchase from the York University Bookstore.
Reserved readings at the library have been selected from periodicals and journals. Go to
http://www.library.yorku.ca, click on the Reserves tab and type in <Course Code> to
access these readings.
Harvard Business Review Articles Exception
Exception: Harvard Business Review articles cannot be placed on e-reserve due to licensing
restrictions
that
apply.
See
here
for
more
information:
http://www.library.yorku.ca/cms/bbl/collections/harvard-business-review/
Please go to this web site to find recommended HBR article readings available at the library
through subscription e-resources themselves: http://researchguides.library.yorku.ca/HBR
Or type in Harvard Business Review under eResources search and use online access
(Business Source Premier) download pdf file and try printing from there with some
exceptions which can only be viewed but not be printed.
The Course Materials Database (CMD) has been created within Schulichs Lotus Notes. It
contains general information for Schulich students and information and materials specific to
this course. Check it frequently.

Student Preparation

for Class and Class Participation: Expectations

In this class you are asked to get out of the habit of being a receiver of ideas, facts, concepts
and techniques, and get into the habit of generating ideas, identifying problems, analyzing
and evaluating alternatives, and formulating workable action plans, thus putting knowledge
into practice.

Class-by-Class Syllabus
The following list of lecture topics and readings indicate the material to be read, reviewed
and/or prepared for the various class sessions.
Note: If any changes in this schedule become necessary, notifications will be
posted on the course CMD, and when changes need to be announced between
classes, an email will be sent to students Lotus Notes email accounts,
notifying them of the change.

<ENTR 6605> p. 4

Week
(1)

INTRODUCTION

Introduction to the course

Students sell themselves as potential group members in a 45 second

presentation.
Prep:

Read:

Week
(2)

45 second self-presentation.
Text: Chapter 1 & 2
Bhide, 1996. The question every entrepreneur must answer. Harvard
Business Review.

OPPORTUNITY RECOGNITION
Students sell their venturing ideas a one - minute elevator pitch.
Creativity and the business idea
Where should we search for ideas?
When is an idea an opportunity?
Prep:

60 second idea presentation.

Read:
Text: Chapter 3
Baron, R. A. 2006. Opportunity Recognition as Pattern Recognition: How
Entrepreneurs "Connect the Dots" to Identify New Business Opportunities.
Academy of Management Perspectives.
Kimberly D Elsbach. 2003 How to pitch a brilliant idea Harvard Business
Review

Week
(3)

THE ENTREPRENEUR & THE ENTREPRENEURIAL TEAM

Personal networks of entrepreneurs
The entrepreneurial mindset
The importance of a team
Forming and building teams
Rewards and incentives
Case: R&R.
Potential Study Questions:
What factors created an opportunity for Bob Reiss?
What risks and obstacles had to be overcome in order to pursue the
opportunity?
Would this approach have worked for Parker Bros., or Milton Bradley?
What should Reiss do next?
Read:
Text: Chapters 5, 6, & 7
Reich, Robert B. 1987 Entrepreneurship reconsidered: the team as a hero.
Harvard Business Review.
Pino G Audia, Christopher I Rider. 2005. A Garage and an Idea: What
More Does an Entrepreneur Need? California Management Review.
Dan Bricklin. 2001 Natural-born entrepreneur. Harvard Business Review.

<ENTR 6605> p. 5

Week
(4)

NEW VENTURE CONCEPTS

Prep:
Team presentations of new venture concepts - a five minute presentation.
Following each presentation, each team will receive feedback from peers
meant to improve and fine tune the new ventures concepts.
Read:
Kim & Mauborgne, 1999. Creating new market space. Harvard Business
Review.
Steven G. Blank 2013. Why the Lean Start-Up Changes Everything

Week
(5)

THE BUSINESS GAME

Strategy for New Ventures
Examining market characteristics and environmental analysis
First Mover Advantage
Building Strategic Assets
In Search of Competitive Advantage
Case: Zipcar
Potential Study Questions:
Evaluate the potential venture and chases progress.
What is the business model? What does the September data on actual
operation tell
you how the business model evolves in practice?
What should Chase do re the September data?
What should be Cahses selling point to potential investors?
Read:
Bhide 1994. How Entrepreneurs Craft Strategies Harvard Business Review
Eisenhardt & Sull 2001. Strategy as simple rules Harvard Business Review

Week
(6)

THE BUSINESS PLAN

The need for a BPturning creative ideas into viable businesses
The BPstructure and content
Case: Heather Evans
Potential Study Questions:
Evaluate the opportunity for Heather Evans.
Evaluate the business plan.
Evaluate each of her financing alternatives.
Who should she approach and on what terms?
Read:
Text: Chapter 4
Sahlman. 1997. How to write a great Business plan. Harvard Business
Review.

Week
(7)

PROGRESS REPORT
Prep:
A report on the progress in developing your new venture

<ENTR 6605> p. 6

Week
(8)

OBTAINING THE NEEDED RESOURCES

Resource requirements
Bootstrapping strategies
Obtaining outside resources
Financing the new venture
Determining capital requirements
Angels and VCs
Case: ONSET Ventures
Potential Study Questions:
What is Onset model for the factors that create an attractive opportunity?
Do you agree or disagree with each of the elements of this model?
How much should Onset raise in this latest fund?
Evaluate Onsets actions with respect to TallyUp so far. How should the
firm deal with the issues presented at the end of the case?
Read:
Text: Chapters 8 & 9
Champion, David 2000 A Stealthier Way to Raise Money. Harvard
Business Review
Diane Mulcahy 2013, Six Myths About Venture Capitalists Harvard
Business Review
Mullins, John 2013 Use Customer Cash to Finance Your Start-Up Harvard
Business Review

Week
(9)

ENTRANCE STRATEGIES
Buying a business
Franchising
Case: Allen Lane
Potential Study Questions:
Evaluate Allen Lanes search for a business.
How should Allen Lane value Plas-Tek?
How much should he bid? Why?
What conditions should he place on his bid?
How should he finance and structure the purchase?
Read:
Text: Chapter 13
Bhid, Amar. 2000. David and Goliath, Reconsidered. Harvard Business
Review

Week
(10)

SELLING YOUR BUSINESS PLAN TO INVESTORS

Financing the new venture (cont.)
Deal structure
How to give a winning presentation
Prep:

Two hard copies of your Business plan/ slide deck

Case: Valhalla
Potential Study Questions:
Should Art Marks vote to make an investment in Telco? What is the
appropriate valuation?

<ENTR 6605> p. 7

What are the main risks facing Telco?

Evaluate Valhallas due diligence process

Read:
Text Chapters 10 & 11
Zider. 1998. How venture capital works? Harvard Business School
Kawasaki, Guy 2001. The Top Ten Lies of Entrepreneurs. Harvard Business
Review
Week
(11)

ENDING THE VENTURE

Harvesting Strategies
Going public
Selling
Failure
Bankruptcy
Liquidation
Case: RightNow Technologies
Potential Study Questions:

What is the right value for the firm?

As Gianfote, what is the lowest price you should sell at? As the
V.C.?
If the firm does not accept the offer what should it do?

Read:

Chapter 15
Champion, David 2001.Too Soon to IPO? Harvard Business Review,
79(2):35-46, 9p
Veit, Ken. The Reluctant Entrepreneur. Harvard Business Review,
Nov/Dec92, Vol. 70 Issue 6, p40, 8p

Week
(12)

BUSINESS PLANS FORMAL PRESENTATIONS

Prep:
BP Presentations
Q&A

Written Assignments/Projects : Descriptions

Peer review weight:
Individual grades on team assignments are determined through a peer review of your team
members. Each member will assign a weight that represents the contribution of each team
member to the team such that the average weight assigned to team members is exactly 50.
See an illustration below.
Note that you are not allowed to give to any group member less than 80/100
Percent given
By A
By A
By A

To A
NA
116
88

To B
120
NA
112

To C
80
84
NA

Average
100
100
100

<ENTR 6605> p. 8
Average
Peer Review Weight=
Average/100

102
102/100

116
116/100

82
82/100

100

A. Self Introduction (Individual presentation)

Due Date: First class
Description: A 45 second presentation in which students are given an opportunity to
introduce themselves and sell their capabilities as potential team members.
B. Business Idea (Individual presentation)
Due Date: Second class
Description: A one-minute elevator pitch, in which students introduce a business opportunity.
C. New Venture Concept
Due Date: Fourth class.
Description: Each venture team will develop a business concept. Please note that when
choosing a venture concept, you make an irreversible decision for the term. You should
therefore make sure that all team members are deeply committed to exploring the selected
idea. During this class, each team will be asked to present the chosen venture concept. Each
team should plan on up to a five minute presentation and on a 10-15 minute follow-up
discussion period.
Submission Requirement: a hard copy of the presentation slides BEFORE your presentation.
D. Business Plan (BP) /Slide deck
Due Date: At the beginning of the 10th class. Late submissions will NOT be accepted.
Submission Requirements: Each team needs to submit two hard copies of the BP /slide deck
(one for me and one for the team who acts as your Reader), and a soft copy sent to me by email. Please add to the BP a cover letter that states: who is your reader (e.g. VC banker,
potential partner etc.) While there are no length requirements, today BP tends to be short
and concise. To get a high grade you need to find a way to make your point in an efficient
way. Unnecessary details often just mud the water. You need to support your BP with
research based evidence.
E. Business Plan Presentation
Due Date: 12th class
Description: Team will make a formal 10 minute presentation of the final BP. The
presentation will be followed by 5 minutes of comments and questions from another team,
which will act as a reader to whom you have directed your BP.
Submission Requirement: a hard copy of the presentation slides.
F. Business Plan Analysis
Due Date: 12th class
Description: Following the presentation of the team whose BP you were assigned to read,
you will have 5 minutes to ask them questions that address weaknesses you have identified.
Please focus on important issues.
Submission Requirements: a hard copy of the presentation slides BEFORE your presentation.
G. Case Analyses -- presentation
Seven cases will be covered in the course. Each team will be assigned to present one case.
Due Date: The cases presentations will take place at the beginning of the class in which the
assigned case is taught.
Description: Team will act as consultant to the entrepreneur in the case. You are required to
make a formal 15 minute presentation. You are required to submit a printed version of your
power point slides before the presentation.
Submission Requirements: a hard copy of the presentation slides BEFORE your presentation.
H. Case Analyses -- write up

<ENTR 6605> p. 9
In addition to the case that you are assigned to present, each team is required to submit 3
written case analyses
Due Date: The cases write-ups should be submitted at the beginning of the class in which
the case is taught.
Submission Requirements: two pages, double-spaced, font: Times Roman, size: 12 and 1"
margins. Note that a team cannot submit the case it presents as one of the 3 write-ups.

Calculation of Course Grade

The final grade will be determined as follows:

Individual grade + (Team grade x Peer review weight) = Final grade
Self-introduction (first class)
2%
Elevator pitch (second class)
6%
Class participation
10%
New venture concept
10%
Written BP /slide deck
25%
Final presentation BP
15%
Comments and questions of VC team (presentation and write up)
10%
Written case reports (3 x 4%)
12%
Case presentation
10%
Total

100%

General Academic Policies: Grading, Academic Honesty,

Accommodations and Exams
Grades at Schulich are based on a 9-value index system. The top grade is A+ (9)
and the minimum passing grade is C- (1). To keep final grades comparable across
courses, elective courses are expected to have a mean grade between 5.2 and 6.2.
The Schulich School does not use a percentage scale or prescribe a standard
conversion formula from percentages to letter grades. Conversions within a course
are at the discretion of the instructor.
For more details on the index, grading policy, and grade point average (GPA)
requirements, consults your student handbook.
Academic honesty is fundamental to the integrity of university education and
degree programs, and applies in every course offered at Schulich. Students should
familiarize themselves with York Universitys policy on academic honesty, which
may be found on the Schulich website:
http://schulich.yorku.ca/current-students/academic-honesty/

<ENTR 6605> p. 10

Quick Reference: Summary of Classes, Activities and Deliverables

Class No., Title
and Date

Case

1.
Introduction

None

Text: Chapter 1 & 2

The question every entrepreneur must
answer

2
Opportunity
Recognition

None

Text: Chapter 3
Opportunity Recognition as Pattern
Recognition
How to pitch a brilliant idea

3.
The Entrepreneur &
The Entrepreneurial
Team

R&R

4.
New Venture
Concepts

None

Creating new market space

Why the Lean Start-Up Changes
Everything

5
The Business Game

Zipcar

How Entrepreneurs Craft Strategies

That Work
Strategy as simple rules

6.
The Business Plan

Heather Evans

Text: Chapter 4
How to write a great Business plan.

7.
Progress Report

Team reports on
progress

8.
Obtaining the
Needed Resources

ONSET Ventures

Text: Chapters 8 & 9

A Stealthier Way to Raise Money
Six Myths About Venture Capitalists
Use Customer Cash to Finance Your
Start-Up

9.
Entrance Strategies

Allen Lane

* Text: Chapter 13
* David and Goliath, Reconsidered.

10.
Selling Your
Business Plan to
Investors

Valhalla

* Text Chapters 10 & 11

* How venture capital works?
* The Top Ten Lies of Entrepreneurs

11.
Ending the Venture

RightNow
Technologies

* Chapter 15
* Too Soon to IPO?
* The Reluctant Entrepreneur

12.
Business Plan
Formal
Presentations

BP
Presentations

Reading

Preparation
Self-introduction

Elevator pitch

Text: Chapters 5, 6, & 7

Entrepreneurship reconsidered
A Garage and an Idea
Natural-born entrepreneur
New Venture
Concept
Presentation (Slides
before
Presentation)

progress reports

Two Hard Copies of

BP and one soft
copy to be sent to
Instructor

Final Presentation
(Slides before
Presentation)

Note: In addition to the case that you are assigned to present, each team is required to

<ENTR 6605> p. 11
submit 3 written case analyses. The cases write-ups should be submitted at the beginning
of the class in which the case is taught.