Joel Adams Ken Stuart Engineering Science 466b © J. Adams & K. Stuart : Starting up a Business March 16, 2004

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : Class Objectives 1.The Business Opportunity Document 2.Non-Disclosure (Confidentiality) Agreements 3.Your Business Ideas and Opportunities 4.Starting a Business

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart Executive Summary (<1) 2.Introduction (Short) 3.The Industry (1-2) 4.The Opportunity (1/2) 5.The Products/Services (1-2) 6.The Market (5-6) 7.Competition (1-3) 8.Management (1-2) 9.Financial Projections (4-5) 10.Investment Requirements (2) TOTAL = 20 pages or less! 9.2: New Venture Business Plan (Number of Pages) These are Denzil Doyle’s suggestions, use your judgment to focus on the most important elements for your business.

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : The Business Opportunity Document This will start the process of getting your ideas down on paper. “There exists an opportunity to….” Try to communicate in as little time as possible to the reader what the overall theme of your business will be. This is the written version of the “Elevator Pitch” “The research into seismic sensor technology which has been carried out in the Department of Geology at Canuck University has resulted in the identification of a new type of blast monitoring device that could be marketed in large quantities to the construction, mining and quarry industries.” – Doyle, page 17

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : Key Objectives of a BOD What is your product/service? What is your target market? What is the size/strength of this opportunity? Why do you need financing? Do you have any evidence? Why you? Do you consider and address the risks?

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : The Entrepreneur’s Toolbox What are you interested in finding out more about? Some of our Ideas: NDA, Intellectual Property, Shareholders Agreements, Option Agreements, Term Sheets, Policy and Procedure Hand Books, Memorandums of Understanding, Sources of Government Funding? GOAL: Provide you with some basic tools that you will use throughout your career.

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : Who should I talk? How do I protect my idea? Who to talk to? Friends and Family Professors Find Business Professionals that have done it before and been successful. People who are too busy to execute on your idea Establish a network of people you feel you can trust

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : Who NOT to talk to? How do I protect my idea? Who NOT to talk to? People that are in related business to what you are thinking of. Be careful of Consultants Also be wary of people who say they help small companies, especially when you are looking for venture capital. But, Good advice IS available for free High-profile and busy people usually love to help young entrepreneurs and will find the time DON’T be afraid to call them up with a reference or just a “cold-call”

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart How do I protect my Idea? The most common way is to sign a (Non-) Disclosure Agreement. Often called an NDA. Young Entrepreneurs often try to have everyone sign an NDA There’s a time and a place to have a NDA signed. You can tell people about your business without disclosing confidential information. You may meet with someone (or company) more than once before you feel it is necessary to sign an NDA. 9.8: The Disclosure Agreement

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart Having a Venture Capitalist Sign an NDA is usually not a good idea. –If the only think protecting your idea is an NDA your idea and business may not be all that credible. –Logic: There must not be much of a barrier to entry. –Impression: Inexperienced in business practises. Will people be able to copy your idea anyway? VC’s are too busy to steal your idea. It is unwise for a VC to sign an NDA because they may be bound by loose wording preventing them from talking to someone else or entering certain deals A VC is often more interested in investing in the team NOT just the idea. 9.9: The Disclosure Agreement

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart Examples: 1)Unilateral Disclosure (Example: see handout) 2) Bi-lateral or Joint Disclosure 9.10: The Disclosure Agreement

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : Key Objectives of your BOD What is your product/service? What is your target market? What is the size/strength of this opportunity? Why do you need financing? Do you have any evidence? Why you? Do you consider and address the risks?

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : Incorporation Types of Companies: 1. Sole Proprietorship 2. Partnership 3. Incorporation We will focus on the Incorporation in this course.

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : Incorporation Forms 1.Using a lawyer to Incorporate vs. Doing it yourself? Depends on Complication of the Incorporation 2.Basic requirements when you incorporate 1.Name (NUANS Search) 2.Official Address 3.Board of Directors (Chairperson, Secretary) 4.President 5.Shareholders Meetings (See Incorporation forms for Ontario Businesses)

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : Corporate Structure Based on Doyle - Figure 18. Shareholders Board of Directors President OperationsEngineering/R&DFinance/AdminSales/Marketing

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : Review KEY TERMS Incorporation Shares Classes Shareholder Board of Directors From Making Technology Happen, D. Doyle © 2002 by Doyletech Corporation

Starting up a Business Engineering Science 466b © J. Adams & K. Stuart : Your Opportunity Document Expected length 1/2 page It’s about Quality not Quantity Assignment: Hand in next week. It won’t be marked and it can be changed in your final report.