1 THEME 9: GROWTH STRATEGIES 1st Part: Vertical integration and Scope of the Firm 2nd Part: Internal and external growth
2 1st Part: Vertical Integration and The Scope of the Firm
3 Vertical Integration and The Scope of the Firm OUTLINE Transactions Costs and the Scope of the Firm. The Costs and Benefits of Vertical Integration. Designing Vertical Relationships.
4 From Business Strategy to Corporate Strategy: The Scope of the Firm Business Strategy is concerned with how a firm competes within a particular market. Corporate Strategy is concerned with where a firm competes, i.e. the scope of its activities. The dimensions of scope are: geographical scope; product scope; vertical scope.
5 Market Economy: Two Economic Organizations Market Mechanism: Individuals and firms make independent decisions that are influenced by market prices. Administrative Mechanism: Firm decisions concerning production, supply and purchased inputs are made by managers and enforced through the system of hierarchy.
6 Transactions Costs and the Scope of the Firm Vertical Product Geographical Scope Scope Scope [A] Single Integrated Firm V 1 V 2 P 1 P 2 P 3 G 1 G 2 G 3 V 3 [B] Several Specialized Firms linked by Markets V 1 V 2 V 3 P 1 P 2 P 3 G 1 G 2 G 3 In situation [A] the business units are integrated within a single firm. In situation [B] the business units are independent firms linked by markets. Are the administrative costs of the integrated firm less than the transaction costs of markets?
7 Cure Ham Industry V1: raising pigs. V2: slaughtering pigs. V3: curing hams. Key issue: transaction costs in the market vs administrative costs of a firm.
8 Transactions Costs and The Existence of the Firm Transaction cost theory explains not just the boundaries of firms, also the existence of firms (see note). In 18th century English woollen industry, no firms-independent spinners and weavers linked by merchants. Residential remodeling industry -- mainly independent selfemployed builders, plumbers, electricians, painters. Where market transaction costs are high, firm is a more efficient means of organization. Note: -Firm understood as an organization consisting of a group of individuals who are interconnected by contracts with a central contracting authority (contractual approach of the firm). -Transaction costs comprise costs of search and contract negotiating and enforcement.
9 Determinants of Changes in in Corporate Scope : Expanding scale and scope of industrial corporations due to declining administrative costs of firms: Advances in transportation, information and communication technologies. Advances in management: accounting systems, decision sciences, financial techniques, organizational innovations, scientific management : Shrinking size and scope of biggest industrial corporations. Increasingly Increased no. of managerial Admin. costs of turbulent decisions. Need for fast firms rise relative external responses to external to transaction environment change costs of markets 1995 onwards: Rapid increase in global concentration (steel, aluminium, oil, beer, banking, cement). Key drivers: quest for market power and scale economies. Also, large corporations better at reconciling size with agility.
10 Vertical Integration: a related diversification Depends on a firm s ownership of vertically related activities. When a firm owns and controls numerous stages of the value chain of its product, then there is a high degree of vertical integration.
11 Types Backward integration, when a firm owns and controls the production of its products components and inputs. Forward integration, when a firm owns and controls activities that were previously done by its customers, such as distribution. Partial vertical integration, when the internal production is not self-sufficient and the purchase of a little amount of supplies is necessary to support further production. Full vertical integration between two stages of production, when during transference between the two no sales or purchases are realized from third parties.
13 The Costs and Benefits of Vertical Integration: BENEFITS Technical economies from integrating processes, e.g. iron and steel production. -but doesn t necessarily require common ownership. Superior coordination. Avoids transactions costs of market contracts, specially in situations where there are: -small numbers of firms; -transaction-specific investments; -opportunism and strategic misrepresentation; -taxes and regulations on market transactions.
14 The Costs and Benefits of Vertical Integration: COSTS Administrative costs of internalization. Differences in optimal scale of operations between different stages prevents balanced Vertical Integration (VI). Strategic differences between different vertical stages creates management difficulties. Inhibits development and exploitation of core competencies. Limits flexibility: -in responding to demand cycles; -in responding to changes in technology, customer preferences, etc. But where system-wide flexibility is required, VI allows speed and coordination in achieving simultaneous adjustment throughout the vertical chain (see Making VI Work: Zara ). Compounding of risk: any problem in one stage can threaten all other stages.
15 Assessing the Pros and Cons Within the same industry, different companies can be successful with very different degrees of vertical integration. When external circumstances are the same, the fact that different companies have different resources and capabilities and pursue different strategies means that they will make different decisions. Key criteria in the next slide.
16 When is is Vertical Integration more attractive than Outsourcing? How many firms are available to undertake the activities? Is transaction-specific investment needed? Does limited information permit cheating? Are taxes or regulation imposed on transactions? Do the different stages have similar optimal scales of operation? Are the two stages strategically similar? How great the need for entrepreneurship & continual upgrading of capabilities. How uncertain is market demand? Are risks compounded by linkages between vertical stages? The fewer the companies the more attractive is VI. If yes, VI more attractive. VI can limit opportunism. VI can avoid them. Greater the similarity, the more attractive is VI. Greater the strategic similarity, the more attractive is VI. Greater the need, the greater the disadvantages of VI. Greater the unpredictability, the more costly is VI. VI increases risk.
17 The value chain for steel cans Iron ore mining Steel production Steel strip production Can making Canning of food, drink, oil, etc. MARKET CONTRACTS VERTICAL INTEGRATION MARKET CONTRACTS VERTICAL INTEGRATION, AND MARKET CONTRACTS What factors explain why some stages are vertically integrated, while others are linked by market transactions?
18 Different Types of Vertical Relationships Low Formalization High Low Spot sales/ purchases Long-term contracts Agency agreements Informal supplier/ customer relationships Franchises Supplier/ customer partnerships Joint ventures Vertical integration Low Degree of Commitment High
19 Designing Vertical Relationships: Long-Term Contracts and Quasi-Vertical Integration Intermediate between spot transactions and vertical integration are several types of vertical relationships: such relationships may combine benefits of both market transactions and internalization. Key issues in designing vertical relationships: -How is risk allocated between the parties? Uncertainties over the course of the contract. For example: franchise agreements franchisee bears more risk. -Are the incentives appropriate, to minimize transaction cost? Very often, the most effective incentive is the promise of future business.
20 Recent Trends in Vertical Relationships From competitive contracting to supplier partnerships, e.g. in autos. From vertical integration to outsourcing (not just components, also IT, distribution, and administrative services). Diffusion of franchising. Technology partnerships (e.g. IBM-Apple; Canon-HP). Inter-firm networks. General conclusion: boundaries between firms and markets becoming increasingly blurred.
21 CASE STUDY
22 2nd Part: Internal and External Growth
23 Internal and External Growth OUTLINE Internal Development. Mergers and Acquisitions. Strategic Alliances.
24 INTERNAL DEVELOPMENT (ID): CONCEPT ID is where strategies are developed by building on and developing an organisation s own capabilities.
25 INTERNAL DEVELOPMENT (ID): MOTIVES Strategic capabilities: Highly technical new products. Direct involvement in new markets. Spread of costs over time. Environment: No other choice or no suitable target. Expectations: Avoiding a traumatic integration.
26 MERGER AND ACQUISITIONS (M&A): CONCEPTS Acquisition is where strategies are developed by taking over ownership of another organization. Merger: Voluntary amalgamation of two (or more) firms into one new legal entity. Mergers are effected by exchange of the pre-merger stock (shares) for the stock of the new firm. Owners of each pre-merger firm continue as owners, and the resources of the merging entities are pooled for the benefit of the new entity (http://www.businessdictionary.com/).
27 MERGER AND ACQUISITIONS Environment: Speed. (M&A): MOTIVES Competitive situation (avoiding excess capacity). Deregulation and financial motives. Strategic capabilities: Exploiting core competences or addressing a lack of resources or/and capabilities. Cost efficiency. Learning. Expectations: Continuing growth expected by shareholders. Senior managers ambitions. Speculative motives rather than strategic ones.
28 MERGER AND ACQUISITIONS (M&A): MAIN DIFFICULTIES Adding any value to the purchases. The integration of the new company. Organisational learning through the transfer of knowledge. Cultural fit ( clash of cultures ). As a result, in the majority of cases it leads to a poor financial performance.
29 EXERCISE GENERAL ELECTRIC FOCUSES ON EUROPE
30 STRATEGIC ALLIANCES: CONCEPT Two or more organisations share resources and activities to pursue a strategy.
31 STRATEGIC ALLIANCES: MOTIVES The need for critical mass. Co-specialisation. Learning from partners. Also important in the public sector: PPP.
32 STRATEGIC ALLIANCES: TYPES At one extreme, loose formulas: Networks: arrangements whereby two or more organisations work in collaboration without formal relationships (the airline industry). Opportunistic alliances: around particular ventures or projects.
33 STRATEGIC ALLIANCES: TYPES At the other extreme, involving ownership: Joint Ventures: arrangements where organisations remain independent but set up a newly created organisation jointly owned by the parents. Consortia: a particular kind of joint venture arrangement typically focused on a particular project (such as the European Airbus).
34 STRATEGIC ALLIANCES: TYPES Intermediate arrangements (contractual in nature, but unlikely to involve ownership), Franchising: the franchise holder undertakes specific activities such as manufacturing, distribution or selling, whilst the franchiser is responsible for the brand name, marketing and usually training (e.g. McDonald s). Licensing: Commonly when the right to manufacture a patented product is granted for a fee (e.g. science-based industries). Subcontracting: when a company chooses to outsource particular services or part of a process (e.g. IT services).
35 STRATEGIC ALLIANCES: TYPES
37 STRATEGIC ALLIANCES: SUCCESS A clear strategic purpose and senior management support. Compatibility at the operational level. Defining and meeting performance expectations. TRUST: competence based and character based.
38 APPLICATION CO-OPS
39 MEMBERS -Needs. -Commitment. -Autonomy and Independence. -Credibility of / Trust on the Board of Directors. KEYS FOR SUCCESS PROFESSIONAL MANAGERS -To be aware of and tuned with the idiosyncrasy of the cooperative formula. Management based on: -Quality/Innovation. -Training. -Planning. RELATIONSHIP BETWEEN MEMBERS & MANAGERS -Social discipline (rules by consensus). -Personal contact, proximity to members. -Information, transparency. -Communication & mutual trust.
International Business Environment & Strategy BC430002S Directions and Methods of Strategy Development Slides based on Johnson, Scholes & Whittington (2005) Exploring Corporate Strategy, 7 th edition Robert
Supplier Relationships Lecture 7 Briony Boydell Managing Business Relationships Objectives of lecture Identify the types of relationships within the supply chain Discuss the benefits of improved relations
Chapter Objectives Chapter 14 Strategies for Firm Growth Bruce R. Barringer R. Duane Ireland 1. Explain the difference between internal growth strategies and external growth strategies. 2. Identify the
chapter 9 Entering Foreign Markets INTRODUCTION A firm expanding internationally must decide: which markets to enter when to enter them and on what scale how to enter them (the choice of entry mode) There
Starting New Ventures -64-361.202 Chap 14. Strategies for Firm Growth Dr. Jack M. Wilson Distinguished Professor of Higher Education, Emerging Technologies, and Innovation PhoneHalo Keychain Sensor alerts
GLOSSARY OF STRATEGIC MANAGEMENT TERMS Acquisition: When one company, the acquirer, purchases and absorbs the operations of another, the acquired. Barriers to Entry/Exit: Economic or other characteristics
Session Objectives Marketing Selection & Entry Strategy How global marketing management differs from international marketing management The increasing importance of international strategic alliances The
A Primer in Entrepreneurship Prof. Dr. Ulrich Kaiser Chair of Entrepreneurship Universität Zürich Fall 2014 Content 2008 Prentice Hall HS14 Seite 2 A Primer in Entrepreneurship, Prof. Dr. Ulrich Kaiser
Planning, Strategy, and Competitive Advantage Chapter 6 website Mark Gosling Office: D404 Phone: 5417 Learning Objectives LO1 Identify the three main steps of the planning process and explain the relationship
13.1 Chapter 13 Supply chain planning and control 13.1 13.2 Supply chain planning and control The market requires specified time, quantity and quality of products and services The operation supplies the
Speech by Shane Tregillis Assistant Managing Director Monetary Authority of Singapore for Regional Seminar on Non-Bank Financial Institutions in East Asia Region Organised by the Thailand Securities and
Advantages, Disadvantages and Risks of the PART 3 27 3 Advantages, Disadvantages and Risks of the Spin-out Proposal and Other Relevant Considerations 3.1 Advantages of the Spin-out Proposal 28 3.2 Disadvantages
Lucia P. BLĂJUȚ Doctoral School of Economics and Business Administration, Al. I. Cuza University, Iași ROLE OF INTERNATIONAL MERGERS AND ACQUISITIONS IN CORPORATE INTEGRATION Literature review Keywords
Defining Merger Transactions for Purposes of Merger Review I. Introduction The ICN s Recommended Practices for Merger Notification and Review Procedures ( RPs ) provide considerable guidance on jurisdictional
ENERGY ADVISORY COMMITTEE Electricity Market Review: Return on Investment The Issue To review the different approaches in determining the return on investment in the electricity supply industry, and to
Innovation Leadership Summit Brisbane 26 th October, 2006 The purpose of this forum was to focus on recent thinking about innovation by leading international researchers, and to consider the implications
TOPIC 2B: MNE ENTRY AND EXPANSION STRATEGIES 1. By strategy, we mean a deliberate choice taken by the owners or managers of firms to organize the resources and capabilities within their control to achieve
8 Steps for Analysing Listed Private Equity Companies Important Notice This document is for information only and does not constitute a recommendation or solicitation to subscribe or purchase any products.
0 Learning Objectives: 11.1 Describe the advantages and disadvantages of the most common forms of business ownership. 11.2 Identify the stakeholders of a business and describe why they are important. 11.3
1 The international market selection process Agenda International market selection process Segmentation Steps for the IMS Entry modes 2 Market segmentation (I) The process of dividing a market into distinct
Université catholique de Louvain Louvain School of Management From resources to recycling how supply chains work Constantin Blome The Myth of the Flat Earth vs The World is Flat Thomas Friedman Russell,
CHAPTER 8: Organisational objectives, growth and scale The Objectives of Organisations Key Revision Points Organisational goals can be classified into a number of categories: Those that aim to make a profit
CHAPTER 9 INTERNATIONAL FINANCIAL MARKETS LEARNING OBJECTIVES: 1. Discuss the purposes, development, and financial centers of the international capital market. 2. Describe the international bond, international
Technology Transfer Principle & Strategy Chapter 1: The Fundamental Principle & Strategy of Technology Transfer Understanding the necessity of technology transfer & the importance of technology outsourcing
MARKET ENTRY MODES FOR INTERNATIONAL MARKETING Introduction International marketing is the application of marketing principles in more than one country. International marketing is also termed as global
Joint ventures and partnering From http://www.businesslink.gov.uk/bdotg/action/layer?r.l1=1074404796&r.s=tl&topicid=10790 50369 A joint venture is when two or more businesses pool their resources and expertise
Insights Winter 2009 58 Financial Adviser Insights FACTORS TO CONSIDER IN PERFORMING A VALUATION ANALYSIS FOR A FAIRNESS OPINION Craig A. Jacobson Valuation analyses are at the core of any fairness opinion
Collaborative Procurement Why would you use it? If your school is interested in working in partnership with other schools to achieve better value for money on procurement. It explains what collaborative
New Organizational Form for Human Capital Power - Discussion on Introducing LLC in Japan - 2004.2. Ministry of Economy, Trade and Industry Industrial Organization Division Organizational forms affect enterprises
MODULE CONTENTS FOR THE PROFESSIONAL DIPLOMA IN LOGISTICS & TRANSPORT To achieve the Professional Diploma, the learner is required to demonstrate competence in the following areas: (1) 1 x Core Management
CIMA E1 Course Notes Chapter 1 Introduction to Organisations 1. Organisations Introduction An organisation is a social group of people that is organised and managed in a way that aims to follow a corporate
Creating Value from Mergers and Acquisitions: The Challenges Sudi Sudarsanam FT Prentice Hall 2003 ISBN: 0201721503, 616 pages Theme of the Book The book s central focus is on the challenges of using mergers
Managing the Global Supply Chain in an Uncertain World Martin Christopher We live in interesting times. Powerful forces are re-shaping the global business scene : financial and economic upheaval in the
Supply Chain Organizational Structure to Support Business Growth By Manish Sharma Thesis Advisor: Dr. Albert Tan Summary: The central aim of this master thesis is to analyze the current Supply Chain Organizational
October 2013 Options for Business Activities in the UAE The matrix below provides an overview of the options available for a foreign company to conduct business activities within the United Arab Emirates
168 CREATING SYNERGY THROUGH MERGER AND ACQUISITION INTEGRATION: AN OVERVIEW SUMANTA DUTTA*; PROF.UTTAM KUMAR DUTTA**; SAJAL DAS*** *Assistant Professor, Department of Business Administration, Dinabandhu
Procurement Strategy STAR Procurement is the shared procurement service for Stockport, Trafford and Rochdale Councils Foreword 1 This STAR Procurement Strategy sets out the strategic direction and priorities
Short Answer Questions Chapter 1-6 Chapter One (1) 1. Briefly define each of the following terms: a. Strategy b. Sustainable competitive advantage c. Business model 2. Identify and briefly describe the
STATUTORY BOARD FINANCIAL REPORTING STANDARD SB-FRS 110 Consolidated Financial Statements This standard applies for annual periods beginning on or after 1 January 2013. Earlier application is permitted
CATALYST FOR CHANGE Capital program evolution in the chemical and pharmaceutical industries SUMMARY Commoditization, public sector austerity and creating a new pipeline of products are some of the major
Major Projects Ready A Guide to Business Collaborative Contracting INFORMED / CONNECTED / COMPETITIVE / SUSTAINABLE MAJOR PROJECTS READY A GUIDE TO BUSINESS COLLABORATIVE CONTRACTING FOR SERVICES INDUSTRIES
MODERN INFORMATION TECHNOLOGY AND ORGANIZATIONAL THINKING OPEN A WINDOW OF OPPORTUNITY FOR ENTREPRENEURIAL SMES by Tor Jarl Trondsen, Ph.D. Associate Professor Norwegian School of Management PO Box 580,
Types of Business Organisation Revision Presentations 2004 Introduction A business is always owned by someone. This can just be one person, or thousands. So a business can have a number of different types
www.corporatefinanceassociates.com Inherent Limits To Self-Funded Growth Inherent Limits to Self-Funded Growth Most small business owners probably agree that one of the top concerns in today s fast changing
Europlatform 2015 Total Cost of Ownership and beyond Copenhagen, 2015-10-07 DINO LEISTENSCHNEIDER, EVP, SOURCING AND FLEET MANAGEMENT What do you want to achieve by applying Total Cost of Ownership models?
1 PLACE: Channels Prof. P.V. (Sundar) Balakrishnan Historical Perspectives on Marketing Plato: In well-ordered states, the storekeepers and salesmen are commonly those who are weakest in bodily strength
13: Private Equity Overview of the sector Note: This sectoral guidance is incomplete on its own. It must be read in conjunction with the main guidance set out in Part I of the Guidance. 13.1 Private equity
Organizing for Sourcing Excellence Insights for impact on profitability and revenue. The Transformation of Procurement Strategic decision making opportunities that can have immediate impact on profitability
The NBS MBA Programme has two connected parts to the programme. The first is the assessed part of this Masters Programme, the Core Modules, Consultancies, Electives, Business Project Dissertation are listed
www.pwc.co.uk November 2011 Managing contractors involved in high impact activities A study of practices adopted by major organisations across six different sectors Contents 1. Introduction 2 2. Executive
University of California, Irvine 2014-2015 1 Management MBA (MGMTMBA) Courses MGMTMBA 200. Management of Innovative Organizations. 4 Units. Using concepts from organization studies and strategy, students
THE MCKINSEY GROWTH MODEL Ansoff s product/market matrix Product / service New Product development Diversification Present Market penetration Market development Present New Market / segment Diversification
Vertical integration, distributors or agents which to use? A Lexis PSL document produced in partnership with Neil Baylis of K&L Gates LLP Different ways to get products to market Distinguishing between
M2M for Telecommunications Companies Strategy Dimensions for Entering the M2M Market 62 Detecon Management Report blue 1 / 2015 Telecommunications companies find themselves facing the threat of stagnating
The Evolving Relationship Between Ethics & Compliance and Internal Audit ISACA North Texas Chapter Meeting April 12, 2012 Paul Liebman, OCEG Fellow Ladner & Associates Or... The Compliance & Ethics Department
Building innovation capacity via PPP Ravi Randeniya - BSc Eng MScE MBA Innovation is a major factor of economic growth and its advancement is a good measure of overall performance in the globalized economy.
Northwestern University Kellogg School of Management SYLLABUS and ASSIGNMENTS International Business Strategy MGMT 460 SECTION 81 FALL 2013 Professor Daniel F. Spulber Office 606 Leverone 491-8675 E-mail:
Global Information Technology & Communications Privacy, Data Protection and Information Management Client Alert Umbrellas for Clouds: Risk Mitigation Strategies for SaaS Transactions www.bakermckenzie.com
Integration of Risk Management and Internal Audit Chartered Institute of Management Accountants, New Zealand Contents Understanding the three lines of defense governance model What is Risk? Risk Management
June 2009 LABORATORY OUTSOURCING Intertek s EVP of Analytical Services, Dr. Andrew Swift, discusses laboratory outsourcing and explains how dedicated analytical service providers are stepping up to support
Financial Services the way we do it Merger & Acquisition, Integration and Divestiture Financial institutions are re-focusing their M&A strategies and objectives while aligning their organizations to adapt
Risikostyring Integrated Performance and Risk Management Torbjørn Undeland, Senior Manager Oslo, 3. juni 2009 Table of Contents Why integrate the management of performance and risk? Key principles of IPRM
Mid-Cap Business Strategies: How Mid-Caps Think about Growth and Financing, How Motivated They Are for Growth, What Drives Their Ambition, What Are Their Major Concerns or Worries A COMPAS Report for Roynat/Financial
29 Structuring your organization to meet global aspirations The matrix structure is here to stay, but its complexity can be minimized, and companies can get more value from it Perspectives on global organizations
Chapter 1 Introduction to Managerial Economics CHAPTER SUMMARY Managerial economics is the science of directing scarce resources to manage cost effectively. It consists of three branches: competitive markets,
Law School on Mergers & Acquisitions Competition Law Aspects of Mergers & Acquisitions iti in Turkey By Bahadır BALKI For a global transaction 1. you have to keep your competition law sensor open, 2. Right
Brief 18 August 2011 Public Procurement Concessions and PPPs C O N T E N T S What are concessions? Different use of the term concession under national laws Does the Directive apply to concessions? What
Finance 4 growth FX & Export Finance Workshop Brian Colgan Irish Exporters Association 2015 Typical Bank Relationship Model What do they hope to achieve? To form a relationship to enable an understanding
How do I Implement Extended Business Analysis? Introduction. Extended Business Analysis allows you to look at the performance of your Enterprise in many different ways apart from just Company Wide Profit
CENTURY ENERGY LTD. FORM 51-102F1 MANAGEMENT DISCUSSION AND ANALYSIS FOR THE YEAR ENDED AUGUST 31, 2014 The following management s discussion and analysis ( MD&A ), prepared as of December 11, 2014, should
MERGER NOTIFICATION AND PROCEDURES TEMPLATE THE NORWEGIAN COMPETITION AUTHORITY April 2009 IMPORTANT NOTE: This template is intended to provide initial background on the jurisdiction s merger notification
Supply Chain Management อาจารย ดร.อ ศว ณ ปส ธรรม Email: firstname.lastname@example.org 11-1 Supply Chain the sequence of organizations (their facilities, functions, and activities) that are involved in producing
Entrepreneurial Finance Strategy, Valuation, and Deal Structure CONTENTS List of Illustrations xvii Abbreviations xxiii Preface xxvii Why Study Entrepreneurial Finance? xxviii What Makes Entrepreneurial
E-Fulfillment Your Competitive Advantage The Supply Chain Value Innovation Company APPROACH METHODS BUSINESS PHILOSOPHY Table of Contents INTRODUCTION... 3 What does it take to win and keep customers?...
Professional Level Essentials Module Corporate Reporting (International) Tuesday 11 December 2012 Time allowed Reading and planning: Writing: 15 minutes 3 hours This paper is divided into two sections:
The Customer Relationship Management Process E d u c a t i n g t h e W o r l d s B e s t A i r F o r c e Slide 1 The Supply Chain Management Processes Information Flow Supply Chain Management Processes
Copyright in the material is owned by the State of New South Wales. Apart from any use as permitted under the Copyright Act 1968 and/or as explicitly permitted below, all other rights are reserved. You
Alternative Asset Classes Page 1 ALTERNATIVE ASSET CLASSES: AN INTRODUCTION PART OF SOUND PORTFOLIO MANAGEMENT IS DIVERSIFYING INVESTMENTS SO THAT IF ONE TYPE OF INVESTMENT IS PERFORMING POORLY, ANOTHER
VENTURE CAPITAL LP REVISED TERM SHEET FIRST ROUND OF VENTURE CAPITAL 20 August 20xx PCI, Inc. 66 Sutton Business Park The Twilight Zone Issue: Venture Capital LP ("VC") and/or any member of its corporate