Addressing some of the early questions that entrepreneurs must ask themselves before beginning on their journey: * What are your goals for your enterprise? (Business, nonprofit, social enterprise) * Will your business be focussed on profit? Social benefit? Will it be a consulting practice? A service company? A product company? * What are the different requirements and resources necessary for your selected enterprise model? * What type of financing should you target: equity, debt, grant funding or a combination of all three? This is the lecture that establishes the framework for the rest of the course and gets entrepreneurs on their way! Part of the CIBC Presents Entrepreneurship 101 lecture series: http://www.marsdd.com/ent101

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Business Development and
Entrepreneurship Basics
Presented by:
Tony Redpath & Allyson Hewitt
Vice President, Partner Programs
Director, Social Entrepreneurship
MaRS Discovery District
14 October 2009
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4. Start with the Basics
1) Why do I want to start this business?
What is my motivation?
2) What resources do I need?
Basement vs. Corporate Office
3) How do I fit into the rest of the world?
Is my service/product unique?
4) What is my business model?
For profit, non profit, hybrid model
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5. The Organizational Spectrum
Non Corporate
-profit with Socially Social
Traditional Social Traditional
Charity Income
Activities Responsible Responsibility Corporation
Enterprise Business
(CSR)
Mission Motive Profit-Making Motive
Stakeholder Accountability Shareholder Accountability
Income invested in Profits redistributed
programs or overhead to shareholders
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6. What are the types of organizations?
…CONSULTING
 Key Characteristics:
 Multiple Participants, Diverse focus, Size
 Examples
– Hatch Associates
 Benefits & Risks of Model
 Low Capital Costs & Minimal Input
 Liability Insurance; lack of support Slide 6
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7. Consulting for Social Enterprises
 Social Enterprises
 Key Characteristics:
 Focused on leveraging core asset (tangible, intangible)
to provide access to market, advice
 Examples
– Sustainability Office @ U of Toronto
– Aperio
 Benefits & Risks of Model
 Less Reliance on traditional funding
 Mission Drift ( Profit and Mission alignment)
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8. What are the types of organizations?
… SERVICES
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9. What are the types of organizations?
…SERVICES
 Key Characteristics:
 Specialty business serving existing businesses
 Examples
 Benefits & Risks of Model
 On-line software as a service
 Capital Costs can be high: labs services: servers
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10. Service Models for Social
Enterprises
 Key Characteristics:
 Market Intermediary Role to serve target population
 Examples
 Benefits & Risks of Model
 Potential to Scale
 Quality Control
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11. What are the types of organizations?
…PRODUCTS
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12. What are the types of organizations?
…PRODUCTS
 Products
 Key Characteristics:
 Tangible offering ( pharmaceutical compound, medical
device, consumer product
 Examples
 Benefits & Risks of Model
 High development costs; market traction
 Production costs high: outsource?
 Potential for huge scale
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13. What are the types of organizations?
…PRODUCTS
 Products
 Key Characteristics:
 Sell a particular product that benefits a disadvantaged
group and/or promotes a more ethical form of existing
product
 Examples: Vision Spring &
 Benefits & Risks of Model
 Competitive Landscape ( pro v. con)
 Potential for huge scale
 Production costs can be high
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14. Show me the Money….
 Forms of Financing
 Debt - borrow from someone, using an asset as
security; rate & time period to be negotiated
 Equity - sell a piece of your venture to someone in
exchange for an investment in the venture
 Bootstrap - self-fund and reinvest all profits for
growth
 Grants – foundations/government funding
 Hybrid Models – important to both enterprise types
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15. The Lemonade Stand Example
Assume you’re 8 years old and you need
$20 to set up a lemonade stand
Revenues Debt 50:50 Equity
Rain $10 lender loses $10 partner loses $15
entrepreneur gets $0 entrepreneur gets $5
Cloud $30 lender is even partner loses $5
entrepreneur gets $10 entrepreneur gets $15
Sun $50 lender is even partner makes $5
entrepreneur gets $30 entrepreneur gets $25
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16. Where can I get debt financing?
 YOU
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17. Sources of Equity Financing
 The 3F’s again – Friends, Family and Fools
 Angels (aka high net worth individuals)
 Generally like to invest in areas that they have worked
in or are comfortable with
 Can add valuable hands-on experience
 http://www.angelinvestor.ca/
 http://www.mapleleafangels.com/186103_186104.html
 Venture Capital Funds
 Different funds invest at different stages in the growth
of a company
 http://www.cvca.ca/ Slide 17
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18. Special Financing Sources
 Proof of Principle / Idea to Innovation
 www.ResearchNet.com
 www.nserc-crsng.gc.ca/index_eng.asp
 NRC - IRAP
 http://irap-pari.nrc-cnrc.gc.ca/main_e.html
 Foundations:
 Trillium Fund -www. trilliumfoundation.org
 Gates Foundation – Slide 18
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www.gatesfoundation.org

19. The Financing Life Cycle
Public Markets
Venture Capital
Seed Funds
Angels
Grants
Risk
Concept Start-up Growth Expansion
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20. The Financing Life Cycle
Public Markets
Venture Capital
Seed Funds
Angels
Grants
Risk
Concept Start-up Growth Expansion
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21. The Financing Life Cycle
Risk
Grants
Concept Start-up Growth Expansion
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22. How do I secure financing/support?
Investors/Backers
are concerned
about Risk
associated with any
start-up
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23. Risks…..
 Technology Risks
 Stage of Development (concept  proof of concept 
prototype of product)
 Product development path (costs and “risks”
 Competitive technologies
 IP Risks
 Nature of the invention
 Scope of the invention
 IP form: Patent, know-how, software
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24. Risks…..
 Market Risks
 Market size, dynamics and growth potential
 Route to market, access, scalability
 USPs of the products or services
 Execution Risk
 Knowledge of the market, networks
 Skills required to move the enterprise through all stages
of development
 Reputation in the marketplace
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25. Risks for the Social Enterprise
 Mission Drift
 Balancing a Social and Financial Bottom Line
 Execution Risk
 Knowledge of the market, networks
 Skills required to move the enterprise through all stages
of development
 Reputation in the marketplace
 General Skepticism in the Global Marketplace
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