Learning Objectives
      •  Describe the evolution of thinking about entrepreneurship 
      •  Recognize that studying entrepreneurial finance leads to 
         better investment and financing decisions
      •  Understand why maximizing value for the entrepreneur is 
         central to the study of entrepreneurial finance
      •  Describe the process of new venture formation from 
         inception to harvesting
      •  Distinguish the various stages of new venture development
      •  Understand the value of tying new venture financing to 
         milestones that mark a venture’s progress
      •  Understand how the business plan is related to strategic 
         planning and implementation
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      Entrepreneurship and the Entrepreneur 
    • What is an Entrepreneur?
       – R. Cantillon – bearer of risk in provision of capital
       – J. B. Say – shifter of resources to higher productivity
       – J. Schumpeter – innovation as disturbing status quo
       – Knight – directs resources in the presence of uncertainty
       – P. Drucker – creating something new, transmuting value
    • Modern view
       – pursuit of opportunities to combine and redeploy 
         resources without regard to current ownership or control 
         of the resources
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        Entrepreneurship is Multidimensional
    • The entrepreneur must: 
       1. perceive an opportunity to create value by 
           redeploying society’s resources
       2. devise a strategy for marshaling control of 
           necessary resources
       3. implement a plan of action to bring about the 
           change
       4. harvest the rewards that accrue from the 
           innovation
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  Figure 1.1 
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             New Venture Survival Rates
    • 50% of new ventures survive at least four 
      years and 30% at least ten years
    • “High growth” firms have a better survival 
      record; 72% survive at least four years
    • One-third of non-surviving entrepreneurs still 
      considered their venture a success
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