Technology Ventures: From Idea to EnterpriseChapter 8: Summary Even if you are on the right track, you’ll get run over if you just sit there. Will Rogers What forms do new businesses take and what are corporate ventures? The appropriate legal and organizational format used to organize a new venture will vary according to several factors such as context, people, legal and tax consequences, and cultural norms. New ventures can range from small businesses or consulting services to high-growth, high- potential enterprises. Other organizations start out operating in a niche market and grow into a broader one. An important contrast to these independent ventures is the corporate new venture. It emerges within larger existing enterprises and is granted autonomy so it can fulfill its promise. Summary Types of Ventures 8

Chapter 8: Organizational Forms Organizational Forms: Independent venture: new venture not owned or controlled by an established corporation. Corporate venture: new venture started by an existing corporation. Nonprofit organization: Corporation, member association, or charitable organization that provides a service but does not earn a profit, nor does it distribute dividends or payments to its employees, donors, or volunteers. Today, these organizations are often called not-for-profit. Family-owned: includes two or more members of a family who hold control of the firm. Franchise: legal arrangement in which the owner of a business format has licensed it to an individual or local firm, called a franchisee. The franchisor is the organization that owns and operates a firm that controls the business format and its associated trademarks and logo. Types of Ventures 8 Technology Ventures: From Idea to Enterprise

Chapter 8: Types of New Business Ventures Types of New Business Ventures: Small business is a sole proprietorship, a partnership, or a corporation owned by a few people. Niche business seeks to exploit a limited opportunity or market to provide the entrepreneurs with independence and a slow- growth buildup of the business. High-growth business aims to build an important new business and requires a significant investment to start up. Types of Ventures 8 Technology Ventures: From Idea to Enterprise

Chapter 8: Types of New Business Ventures Types of New Business Ventures (continued): Radical innovation business seeks to commercialize an important new innovation and build an important new business. Nonprofit organization is a corporation or a member association initiated to serve a social or charitable purpose. Corporate new venture (CNV) is that started by an existing corporation for the purpose of building an important new business unit as a solely owned subsidiary or a spin-off as a new independent company. Types of Ventures 8 Technology Ventures: From Idea to Enterprise

Chapter 8: Table 8.1 The Five Types of New Ventures Types of Ventures 8 Technology Ventures: From Idea to Enterprise

FAMILY BUSINESS

Franchise Types of franchise Business-format franchise Trade-name franchise Product-distribution franchise

Chapter 8: Table 8.6 Characteristics of Corporate New Ventures Types of Ventures 8 Technology Ventures: From Idea to Enterprise

Chapter 8: Table 8.7 Types of Ventures 8 Technology Ventures: From Idea to Enterprise

Chapter 8: Figure 8.3 – Four models of corporate entrepreneurship Types of Ventures 8 Technology Ventures: From Idea to Enterprise

Chapter 8: Table 8.14 Types of Ventures 8 Technology Ventures: From Idea to Enterprise

Chapter 8: Table 8.12 – Extracting value from corporate venturing Types of Ventures 8 Extracting value from corporate venturing Technology Ventures: From Idea to Enterprise

Chapter 8: Exercise A new firm plans to develop and offer a computer design program for creating and machining hip replacement joints. Describe the cluster this firm should locate within. What sources of legitimacy should it focus on? Should it outsource the software programming of its design software product? Types of Ventures 8 Technology Ventures: From Idea to Enterprise

Chapter 8: Principle An important, vigorous new business venture can emerge from a large firm when afforded the appropriate balance of independence, resources, and people to respond to the opportunity. Types of Ventures 8 Technology Ventures: From Idea to Enterprise

Chapter 8: Venture Challenge VENTURE CHALLENGE 1)Using table 8.1, describe the specific type of new venture selected by your team. 2)Assuming your venture was developed as a corporate venture, describe the advantages and disadvantages of this approach using table 8.9 Types of Ventures 8 Technology Ventures: From Idea to Enterprise

Technology Ventures: From Idea to OpportunityChapter 8: DVD Videos DVD Videos “Sustainability for Non-Profit Organizations” Kavita Ramdas (Global Fund for Women) “Classes of Innovations in the Product Leadership Zone” Geoffrey Moore (Mohr Davidow Ventures) Types of Ventures 8