MGP 244 New and Small Business Ventures UPDATED: 7/24/06 Summer 2006 Greg Chabrier (gbchabrier@ucdavis.edu) David Petroni (dfpetroni@ucdavis.edu) Basic Information Location: Time: Instructors: Office Hours: One Capital Mall, Sacramento, CA Tuesday, 6:00-9:00 pm Greg Chabrier (BS/MBA) David Petroni (BS/MBA) Tuesday, 5-6 pm at One Capital Mall (or by appointment) Course Description So you want to start a new venture? Or perhaps you ve been asked to join a start-up. A friend of a friend in the venture capital industry said your idea has legs. You suddenly have the opportunity to buck corporate bureaucracy and build a company the way you want, with the rules you set. How exciting! And it gets better. You ve just read yet another rags to riches story about Joe or Jane Entrepreneur who converted an average idea into a multi-million dollar enterprise. Game on! Not so fast. New ventures are risky. We ve all seen great ideas destroyed by a weak team or poor execution. We ve also seen phenomenal companies miss or misunderstand the market. Despite remarkable sums of available capital, we ve even seen great companies fail to get funded because of a weak go to market or investor pitch. Net, net it s easy to start a new business venture. It is very difficult to make one successful. This course explores the process of starting a new business venture from the entrepreneur s perspective. Through a combination of interactive lectures, case studies and guest speakers, students will get exposed to the new business cycle with topics including business planning, fundraising, technology/markets, team dynamics and business development. We will address the attendant risks of new or small business ventures and explore strategies to mitigate or even thrive in that context. This class will be hands on. In addition to active class participation, students will be asked to form small groups that will identify, develop, and present a new business venture idea. Teams are invited to select an original idea or to use one of several real business concepts currently being developed at UC Davis. As a culmination of your ten week course, you will have the opportunity to present your venture to real VCs in a friendly environment. Who knows you might just get funded!
Required Reading Materials Textbook: Technology Ventures: From Idea to Enterprise (R.C. Dorf & T. Byers 2005) ISBN: 007-285-3530; McGraw-Hill Irwin Readings: Some Thoughts on Business Plans (HBS Product #897101), 32 pgs. Valuation, Financing, and Capitalization in a New Venture Context (HBS Product #806058), 5 pgs. New Venture Financing (HBS Product #802131), 13 pgs. Cases: All Cases can be found in the Required Textbook Biodiesel Incorporated Artemis Images Yahoo! 1995 Danger, Inc. Course Grading The course will be graded on a point basis with 1000 available points. A = 950 and above A- = 900 949 B+ = 875 899 B = 850 874 B - = 825 849 C and below = < 825 Points will be allocated as follows: Class and Team Participation (20% - 200 points): The new venture process is by its nature both interactive and expressive. The success of the course is tied to the insightful comments and questions from all students. You are asked to come to each session prepared and to engage with the instructors and speakers on an active basis. In addition, given that the course will involve a significant amount of team work you will be graded on your individual contributions to the team. Team Deliverables New Venture Project (30(50% - 300 500 points): Students will be divided into groups and will manage a potential new venture from idea through to investor presentation. Key deliverables see course schedule for due dates will carry the following weights: Business Proposal 1 pager (50 points) Elevator Pitch 2 minute presentation (50 points) Executive Summary (a) 3-5 pages 1 page (50 points) Executive Summary (b) 3-5 pages 3-5 pages (50 points) Draft & Final Investor Presentation 30 minute presentation (35150 points)
Course Grading (continued) Case write-ups, Speaker Notes (10% - 100 points): Throughout the course students will be assigned certain tasks as individuals and as teams. Case presentations (the format and requirements to be spelled during the course) are due at the start of the respective class in which the case is covered. Speaker notes are one page summaries of key messages by speaker and are due the week following a given speaker presentation. Venture Concept Vocabulary Quizzes (Bonus Points Only): Students will be given a pre- and postvocabulary test on random new venture terms and concepts to demonstrate knowledge gained during 10 week semester. Final Paper Business Plan (230% - 2300 points): Each team will be required to submit one complete business plan for their venture project. The business plan is due no later than September 5, 2006 and must be approximately 8-10 single spaced pages plus financial statements and related exhibits.
MGP 244 Course Schedule Students are required to read all required readings in advance of the schedule class. It is advised that students read the core Technology Ventures text on an expedited basis as it covers topics germane for all class sessions. Class # Date Topic Assignment Speaker Notes 1 June 20 The New Venture From Idea to Action TV: Chapter 1 Vocabulary test 1 None Class will be divided into teams of 3-4 2 June 27 What is it? Defining the Business Charter and Structure TV: Chapter 2-5 Meg Arnold, Todd Stolz (UC Davis Connect) Teams will propose or select new venture product ideas 3 July 11 Understanding Technology Risk Part 1 TV: Chapter 6-10 Case: Biodiesel, Yahoo! 1995 H/W: 1-page executive summary about venture Corley Phillips (ARV) and Pete Van De Venter (Synapsense) Venture Project ideas to be approved by end of class 4 July 18 Understanding Technology Risk Part 2 TV: Chapter 6-10 Case: None H/W: Elevator Pitch Roy Sardiña (Steelpoint Capital Partners) Teams will present elevator pitches to class and speakers 5 July 25 Planning the Go to Market Strategy Sell, Sell, Sell TV: Chapter 11 Case: Artemis Images H/W: Case Writeup for Artemis Images due before class Venkat Mohan (Norwest Venture Partners)
6 Aug.1 Getting Financed New Venture Financing Options Reading: Valuation, Financing and Capitalization in New Venture Context and New Venture Financing H/W: 1 st Draft of Investor Presentation Due Russ Aldrich (Guide Ventures) Teams to schedule times to meet DP/GC outside of class for feedback on venture project
MGP 244 Course Schedule (continued) Class # Date Topic Assignment Speaker Notes 7 Aug.8 Preparing the Numbers Assessing Financial Risk TV: Chapter 16-20 Reading: A Note on Business Plans H/W: 3-5 Page Executive Summaries Due (Mini-Business Plans) Pam Marrone (formerly with AgraQuest, now with new start-up) Note: Class will start 15 minutes early to accommodate Pam s schedule 8 Aug. 15 Assembling the Team Recognizing Organizational Risk TV: Chapter 12-13 TBD 9 Aug. 22 Business Development Options What is your Exit Strategy? TV: Chapter 14 Case: Danger, Inc. H/W: 1 st Half of Class Final Investor Presentation VC Panel TBD First set of Teams will present full investor pitches to panel of VCs, entrepreneurs 10 Aug. 29 Bringing it all Together: The New Venture H/W: 2 nd Half of Class - Final Investor Presentation AFTER CLASS PARTY WITH VC/SPEAKER COMMUNITY VC Panel TBD Remaining Teams to present full investor pitch Final Sept. 5 Deadline for Business Plans: 5:00 pm Team Business Plans Due No class