Week 1 notes

Entrepreneurship
- Process of changing ideas into commercial opportunities and creating value.

Entrepreneur
- Individual who thinks, reasons, and acts to convert ideas into commercial
opportunities and to create value.

Process:
- Developing opportunities
- Gathering resources
- Managing and building operations

 Creating value.

Entrepreneurial traits:
A successful Entrepreneur:
- Sees and seize a commercial opportunity.
- Tends to be doggedly optimistic.
- Plans to obtain the physical, financial and human resource needed for the
venture to succeed.
Sources of entrepreneurial opportunities: !!! Important image

Principles of Entrepreneurial finance:

1. Real, Human, and Financial Capital must be rented from owners.
2. Risk and expected rewards go hand in hand.
3. While accounting is the language of the business, cash is the currency.
4. New venture financing involves search, negotiation, and privacy.
5. A venture’s financial objective is to increase value.
6. It is dangerous to assume that people act against their own self-interest.
7. Venture character and reputation can be assets or liability.

Roles of Entrepreneurial finance:

Entrepreneurial finance is an:

- application and adaptation of financial tools and techniques to the planning,
funding, operation, and valuation of an entrepreneurial venture
金融工具和技术的应用和适应计划，资金，运作，和评估的创业企业

Entrepreneurial finance
- focuses on the financial management of a venture as it moves through its life cycle,
beginning with its development stage & continuing through to when the
entrepreneur exists or harvests the venture
专注于企业在其生命周期中的财务管理，从其发展阶段开始，一直到企业家存在或收获企业
The successful venture life cycle:
1. Development stage
2. Start-up stage
3. Survival stage
4. Rapid-growth stage
5. Early-maturity stage
Financing through the successful venture life cycle:
- Developing stage (seed financing).
- Start-up stage (start up financing).
- Survival stage (first-round financing).
- Rapid-Growth stage (second-round mezzanine, and liquidity stage financing).
- Early maturity stage (bank loans, issuing bonds, & issuing stock).