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Entrepreneurship for the 21st Century

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 ninth edition
LearN aNd PraCtiCe How to Be a
SuCCeSSfuL eNtrePreNeur!
New Venture Creation: Entrepreneurship for the 21st Century is about the process of getting a new venture
started, growing the venture, successfully harvesting it, and starting again. The book presents the
substantial body of knowledge about the entrepreneurial process in a pragmatic way—through text, case
studies, and hands-on exercises—to help readers compress their learning curves, reduce their ultimate

New VeNture CreatioN

New
risk and pain, and allow them to gain more from their subsequent entrepreneurial experiences. New and

ninth edition
hallmark features include:

• New coauthor, Rob Adams, brings his substantial startup, venture investing, and teaching experience
to the discussion.

Rob is on the faculty of the MBA program at the University of Texas at Austin, where he
runs Venture Labs Investment Competition (formerly Moot Corp™) and is the Director of
Texas Venture Labs, a campus-wide initiative to accelerate the rate of university-based startups. VeNture
CreatioN
He’s a former software executive, entrepreneur, and institutional venture capital fund manager.

He has founded or financed more than 40 companies which have launched more than 100
products and has raised more than a billion dollars of capital.

He is an active angel investor and board member for early stage companies.

Md. Dalim #1167983 10/31/11 Cyan Mag Yelo Black

• Extensive text revision has tightened the presentation and improved the flow while covering the same
or more information.
Entrepreneurship for the 21st Century
• More attention is given to the impact and exploitation of technology in entrepreneurship.

• The latest updates include examples of entrepreneurs in action coping with the post–Internet bubble

Spinelli • Adams
era, the mortgage loan crisis in 2007, and the recession of 2008.

• Two chapters, “Clean Commerce Is an Opportunity Sea Change” and “Opportunities for Social
Entrepreneurship,” present the enormous opportunities for entrepreneurs to meet environmental and

•
wide-ranging social challenges.

Chapter 8, “The Business Plan,” presents a complete business plan guide along with tips, practical
Stephen Spinelli, Jr.
advice, and know-how from successful entrepreneurs and investors on the development and presentation
of the plan. Robert Adams
To learn more about the ninth edition of New Venture Creation: Entrepreneurship for the 21st Century,
visit www.mhhe.com/spinelli9e
spi29104_fm_i-xx.indd Page vii 11/7/11 11:18 AM user-f466
About the Authors
The majority of Dr. Spinelli’s professional experi-
ence has been in entrepreneurship. He was a found-
ing shareholder, director, and manager of Jiffy Lube
International. He was also founder, chairman, and
CEO of American Oil Change Corporation. In 1991,
he completed a sale of Jiffy Lube to Pennzoil
Company. Dr. Spinelli has led the Entrepreneurship
Division at Babson and taught full-time. He has not
abandoned his business roots. He continues to con-
sult with regional, national, and international compa-
nies; serves as a Director at several corporations; and
participates as an angel investor with investments in
more than a dozen start-ups.
Dr. Spinelli is the quintessential “pracademic”—a
business practitioner turned academic. Having suc-
cessfully harvested Jiffy Lube, Dr. Spinelli was in-
vited to attend the Price-Babson College Fellows
Program and his career in academia was launched.
After several years of part-time teaching, he joined
the ranks of full-time faculty after receiving his PhD
in October 1995 from Imperial College, University
of London. Dr. Spinelli’s expertise is in start-up and
growth management. His research has focused on an
understanding of strategic entrepreneurial relation-
ships. He is the author of more than two dozen jour-
nal articles, book chapters, academic papers, and
teaching case studies. He is also the author of six
books including Franchising: Pathway to Entrepre-
neurship (Prentice-Hall, 2003). His latest book,
Never Bet the Farm, is co-authored with Anthony
Iaquinto. A superb educator, he served as a key mem-
ber of the faculty of the Price-Babson College Fellows
Program’s Symposium for Entrepreneurship Educa-
tors (SEE) for 12 years, in addition to his teaching in
the undergraduate, graduate, and executive educa-
tion programs. Dr. Spinelli is a shining example of the
many contributions that entrepreneurs can make to
an academic institution. He has led the international-
ization of SEE to Chile, Argentina, Costa Rica, China,
and Europe. In 2003 Dr. Spinelli founded the Babson
Historically Black Colleges and Universities case
writing consortium. This group is dedicated to writing
entrepreneurship teaching cases focused on African
American entrepreneurs.
He has been a leading force in curriculum innova-
tion at Babson and, with his colleagues in Entrepre-
Copyright © The McGraw-Hill Companies, Inc.
neurship Division, continually defines and delivers
new initiatives. In 1999, he led the design and imple-
mentation of an Entrepreneurship Intensity Track
for MBAs seeking to launch new business ventures
upon graduation. Building on this highly successful
initiative, he led the design and development of
ACE––an accelerated honors curriculum for aspiring
entrepreneurs in Babson’s undergraduate program.
Dr. Spinelli’s presentation to the United States Asso-
ciation for Small Business and Entrepreneurship
Volume/207/es/MH01495/spi29104_disk1of1/0078029104/spi29104_pagefile
vii
(USASBE) resulted in the naming of the F.W. Olin
Graduate School of Business as the 2002 National
Model MBA program.
Dr. Spinelli has been a strong voice for entrepre-
neurship. He has been a keynote speaker for Advent
International’s CEO Conference, the MCAA National
Convention and Allied Domecq International’s Re-
tailing Conference, the Entrepreneur’s Organization
at MIT and many others; he has been called to testify
before the U.S. Senate Subcommittee on Small Busi-
ness and Entrepreneurship. He is often quoted as an
expert in the field in such leading publications as The
Wall Street Journal, Forbes, The Financial Times,
Success magazine, and INC. He also serves as a direc-
tor for several local, regional, and national not-for-
profits and community based associations.
President Stephen Spinelli was touted as a new
model of college president in a front page story on
May 17, 2008, in the Philadelphia Inquirer. He calls
Philadelphia University a 126-year-old start-up, a
university with the entrepreneurial zeal that drives an
innovative curriculum and applied research.
Robert J. Adams, Jr.
Rob Adams is on the faculty of the MBA program
at the University of Texas at Austin, where he teaches
entrepreneurship and is the Director of Texas Venture
Labs.
Dr. Adams is a former software executive, entrepre-
neur, and institutional fund manager. He has served on
many corporate boards and has founded or financed
more than 40 companies, which have launched more
than 100 products and raised more than a billion
dollars of capital. Dr. Adams is currently active with a
number of technology and life sciences companies as a
board member or advisor.
Prior to his appointment at The University of
Texas he was in the venture capital industry, holding
a partner position at TL Ventures and Managing
Director and Founder positions at AV Labs (Austin
Ventures) and Tejas Venture Partners. Prior to the
venture business he was a software operating execu-
tive for two decades. This career included positions
in sales, marketing, and general management. He
was with Lotus (NYSE: IBM), joining the company
shortly after its public offering. Adams was their first
corporate sales representative, and went on to be
instrumental in the development and launch of
both 1-2-3 for Macintosh and Lotus Notes. He
then founded and was CEO of Business Matters, a
venture-backed developer of financial modeling
products that was acquired. He was an executive with
Pervasive Software (NASDAQ: PVSW), a company
he helped take public.
Dr. Adams holds a Bachelor of Science degree in
Industrial Engineering from Purdue University,
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viii About the Authors
where he is a Distinguished Alumnus; a Masters of
Business Administration from Babson College’s Olin
School of Management; and a PhD in Management
from Capella University. He has taught at the MBA
programs of The Acton School of Business, Babson
College, The University of Texas at Austin, and St.
Edwards University.
Dr. Adams is a nationally recognized speaker on
entrepreneurship and product and financing strategy.
He recently keynoted the INC. 500 business confer-
ence and consults for numerous Fortune 500 compa-
nies. He blogs for Inc.com, and is on the board of
directors for Huffington Small Business. He has been
covered in BusinessWeek, Forbes, Fortune, Money,
The New York Times, The Wall Street Journal, Wash-
ington Post, on Bloomberg Radio, Public Television,
and public radio’s nationally syndicated “Market-
place” program.
Volume/207/es/MH01495/spi29104_disk1of1/0078029104/spi29104_pagefile
Rob Adams is the author of A Good Hard Kick in
the Ass: Basic Training for Entrepreneurs (Random
House/Crown, 2002); and If You Build It Will They
Come? Three Steps to Test and Validate Any Market
Opportunity (Wiley, 2010).
He provides expert testimony on technology-
related business issues, and has consulted on
economic development and early stage company
investment and its impact on economies for various
governments including Canada, Chile, Costa Rica,
India, Malaysia, New Zealand, and Thailand.
Dr. Adams is a Fellow at the IC2 Institute, a Uni-
versity of Texas–based foundation that runs the
Austin Technology Incubator. He is a visiting Profes-
sor at Thammasat University in Thailand and The
University of Manitoba. He is an avid downhill skier
and runner. He was a collegiate rower and graduated
from the Marine Corps’ Officer Candidate School.
Copyright © The McGraw-Hill Companies, Inc.
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PREFACE
A Book for a New Generation of
Entrepreneurial Leaders—Worldwide
The entrepreneurship revolution in America over the
past 40 years has had an extraordinary impact on the
cultural and economic landscape in the United States.
While there will always be opportunities for improve-
ment and innovation, America’s opportunity-driven
style of entrepreneurship has sparked an entrepre-
neurial revolution around the globe.
Technology has certainly played a major role in
this global phenomenon. In 2001 there were almost
500 million Internet users; in 2007 that number more
than doubled to 1.1 billion. Four years later Internet
users in the world total over 2 billion. In the United
States an iPod is sold every eight seconds. Entrepre-
neurship and the Internet continue to flatten the
world at a staggering pace, spawning fertile fields of
opportunities.
In our roles as students, teachers, researchers, ob-
servers, and participants in this stunning revolution,
we see that global adoption of the entrepreneurial
mind-set is growing exponentially. That new venture
mind-set, which increasingly places a premium on sus-
tainable models, is now affecting strategies at global
corporations and in the not-for-profit world as well.
The golden age of entrepreneurial reasoning, value
creation and capture, and philanthropy has arrived.
Copyright © The McGraw-Hill Companies, Inc.
An Edition for an Era of Uncertainty
and Extraordinary Opportunity
The new millennium is being defined as much by
worldwide challenges and uncertainty as it is by the
enormous opportunities afforded by technology,
global communications, and the increasing drive to
ix
Volume/207/es/MH01495/spi29104_disk1of1/0078029104/spi29104_pagefile
develop socially, economically, and environmentally
sane and sensible new ventures. As with past genera-
tions, entrepreneurs in this arena face the ultimate
and most demanding juggling act: how to simultane-
ously balance the insatiable requirements of mar-
riage, family, community, and new ventures.
A Book about the Entrepreneurial
Process: The Basis for a Curriculum
as Well as a Course!
New Venture Creation is about the actual process of
getting a new venture started, growing the venture,
successfully harvesting it, and starting again.
There is a substantial body of knowledge, con-
cepts, and tools that entrepreneurs need to know—
before, during, and after taking the start-up
plunge—if they are to get the odds in their favor. Ac-
companying the explosion in entrepreneurship has
been a significant increase in research and knowl-
edge about the entrepreneurial process. Much of
what was known previously has been reinforced and
refined, whereas some traditional knowledge has
been challenged. Numerous new insights have
emerged. New Venture Creation continues to be the
product of experience and considerable research in
this field—rooted in real-world application and re-
fined in the classroom.
The design and flow of this book are aimed at cre-
ating knowledge, skills, and awareness. In a prag-
matic way—through text, case studies, and hands-on
exercises—students are drawn in to discover critical
aspects of entrepreneurship, and what levels of
competencies, know-how, experience, attitudes,
resources, and networks are required to pursue dif-
ferent entrepreneurial opportunities. There is no
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x Preface
substitute for the real thing—actually starting a com-
pany. But short of that, it is possible to expose stu-
dents to many of the vital issues and immerse them in
key learning experiences, such as critical self-assess-
ment and the development of a business plan.
The exciting news is that you can learn from other
people’s experiences, know-how, and wisdom; you don’t
have to learn it all by doing it yourself. By fully engaging
the material in this book—the required analysis, think-
ing, and practice with the cases, exercises, assignments,
and discussions both in and out of the classroom—you
can significantly compress your learning curve, reduce
your ultimate risk and pain, and gain a lot more from
your subsequent hands-on experiences.
This book is divided into five parts. Parts I through
IV detail the driving forces of entrepreneurship: op-
portunity recognition, the business plan, the founder
and the team, and resource requirements. Part I
describes the global entrepreneurial revolution and
addresses the mind-set required to tackle this tremen-
dously challenging and rewarding pursuit. Part II lays
out the process by which real opportunities—not just
ideas—can be discovered and selected. The chapters
in Part II examine the type of opportunity around
which higher-potential ventures can be built (with ac-
ceptable risks and trade-offs), sustainable enterprising,
and opportunities for social entrepreneurship. Part III
concerns entrepreneurial leadership, team creation,
and personal ethics. Part IV addresses franchising as
an entrepreneurial vehicle, marshalling resources, en-
trepreneurial finance, and fund-raising. In Part V, the
book concludes with a discussion of strategies for suc-
cess, managing rapid growth, and harvest issues.
Once you understand how winning entrepreneurs
think, act, and perform, you can establish goals to
emulate those actions, attitudes, habits, and strate-
gies. The book addresses practical issues such as the
following:
What are my real talents, strengths, and weak-
nesses? How can I exploit my talents and
strengths and minimize my weaknesses? How
can I recognize when an opportunity is more
than just another good idea, and whether it’s one
that fits with my personal mind-set, capabilities,
and life goals? Why do some firms grow quickly
to several million dollars in sales but then stum-
ble, never growing beyond a single product?
What are the critical tasks and hurdles in seizing
an opportunity and building the business? How
much money do I need, and when, where, and
how can I get it on acceptable terms? What fi-
nancing sources, strategies, and mechanisms can
I bring to bear throughout the process—from
pre-start, through the early growth stage, to the
harvest of my venture?
Volume/207/es/MH01495/spi29104_disk1of1/0078029104/spi29104_pagefile
What are the minimum resources I need to gain
control over the opportunity, and how can I do
this? Is a business plan needed? If so, what kind
is required, and how and when should I develop
one? For what constituents must I create or add
value to achieve a positive cash flow and to
develop harvest options? What is my venture
worth, and how do I negotiate what to give up?
What are the critical transitions in entrepreneurial
management as a firm grows from $1 million, to
$5 million, to over $25 million in sales?
What are some of the pitfalls, minefields, and
hazards I need to anticipate, prepare for, and
respond to? What contacts and networks do I
need to access and develop?
Do I know what I do and do not know, and do I
know what to do about this? How can I develop
a personal entrepreneurial game plan to acquire
the experience I need to succeed? How critical
and sensitive is the timing in each of these areas?
Why do entrepreneurship and entrepreneurial
leadership seem surrounded by paradoxes, well-
known to entrepreneurs, such as these:
Ambiguity and uncertainty versus planning
and rigor.
Creativity versus disciplined analysis.
Patience and perseverance versus urgency.
Organization and management versus
flexibility.
Innovation and responsiveness versus
systemization.
Risk avoidance versus risk management.
Current profits versus long-term equity.
The New Venture Creation models are useful not
only as a comprehensive textbook for a course in en-
trepreneurship, but also as a road map for a curricu-
lum or departmental major in entrepreneurship.
The Ninth Edition: An Additional Offer,
New Data, and More Succinct Presentation
This new edition of New Venture Creation is a sig-
Copyright © The McGraw-Hill Companies, Inc.
nificant update from the eighth edition. The most
important change is the addition of Rob Adams as a
co-author. Professor Adams is another classic “praca-
demic” but with a twist. After being a successful en-
trepreneur Rob became a successful venture investor
before becoming a professor. He continues to bal-
ance his life through involvement in the practice, fi-
nance, and teaching of entrepreneurship. He has also
brought special attention to the impact and exploita-
tion of technology in entrepreneurship.
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Preface
A special effort has been made to include cases
that capture the dynamic ups and downs new firms
experience over an extended time. By grappling with
decisions faced by entrepreneurs—from start-up to
harvest—this text offers a broad and rich perspective
on the often turbulent and unpredictable nature of
the entrepreneurial process.
We have updated our real-world application of the
Timmons Model of the entrepreneurial process.
For those concerned about our environment and
wide-ranging social issues and how these present
enormous opportunities for your generation of entre-
preneurs to solve these problems, we have updated
two chapters, “Clean Commerce Is an Opportunity
Sea Change” and “Opportunities for Social Entrepre-
neurship,” which you will find thought-provoking and
worthwhile.
We have been more parsimonious with words in
the new edition, streamlining your reading experi-
ence and reducing the total volume of the text by al-
most 20 percent. This improves the flow of the
discussion, which now has a greater emphasis on the
worldwide impact of entrepreneurship.
Copyright © The McGraw-Hill Companies, Inc.
Volume/207/es/MH01495/spi29104_disk1of1/0078029104/spi29104_pagefile
xi
The new ninth edition of New Venture Creation
contains the latest updates, including examples of en-
trepreneurs in action coping with the post–Internet
bubble era, the mortgage loan crisis of 2007, and the
recession of 2008.
As we head into the second decade of the 21st
century, entrepreneurship has established itself as a
form of strategy for companies of all sizes competing
in the global economy. We are confident that a study
of New Venture Creation will help you in your pursuit
of success as a student, as an entrepreneur, and as a
player on the stage of worldwide commerce!
Stephen Spinelli, Jr.
e-mail: SpinelliS@PhilaU.edu
website: www.philau.edu
Robert J. Adams, Jr.
e-mail: rob.adams@mccombs.utexas.edu
website: www.drrobadams.com
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BRIEF CONTENTS

PART I PART IV
The Founder 1 Financing Entrepreneurial
Ventures 333
1 The Global Entrepreneurial Revolution for a
Flatter World 3 11 Resource Requirements 335
2 The Entrepreneurial Mind: Crafting a Personal 12 Franchising 353
Entrepreneurial Strategy 35
13 Entrepreneurial Finance 375
14 Obtaining Venture and Growth Capital 395
PART II
15 The Deal: Valuation, Structure,
The Opportunity 85 and Negotiation 433
16 Obtaining Debt Capital 453
3 The Entrepreneurial Process 87
4 Clean Commerce Is an Opportunity PART V
Sea Change 111
Start-up and Beyond 491
5 The Opportunity: Creating, Shaping,
Recognizing, Seizing 129
17 Leading Rapid Growth, Crises, and Recovery 493
6 Screening Venture Opportunities 165
18 The Family as Entrepreneur 525
7 Opportunities for Social Entrepreneurship 223
19 The Harvest and Beyond 559
8 The Business Plan 245

Index 579
PART III
The Founder and Team
Copyright © The McGraw-Hill Companies, Inc.

277

9 The Entrepreneurial Leader and the Team 279

10 Ethical Decision Making and the Entrepreneur 315

xii
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TABLE OF CONTENTS
PART I
The Founder 1
1 The Global Entrepreneurial Revolution for
a Flatter World 3
Entrepreneurship Flattens the World 3
Two Nobel Prizes Recognize
Entrepreneurship 4
A Macro Phenomenon 5
Entrepreneurship: 40 Years as a
Transformational Force 5
Four Entrepreneurial Transformations
That Are Changing the World 6
Entrepreneurship as the New
Management Paradigm 6
Entrepreneurship as a New
Education Paradigm 7
Entrepreneurship as the New
Not-for-Profit and Philanthropy
Management Paradigm 8
The Energy Creation Effect 8
The Road Ahead 9
The Genie Is out of the Bottle 10
Entrepreneurship: Innovation 1
Entrepreneurship 5 Prosperity
and Philanthropy 10
New Venture Formation 11
Copyright © The McGraw-Hill Companies, Inc.
The Entrepreneurial Revolution: A Decade
of Acceleration and Boom 18
Entrepreneurs: America’s Self-Made
Millionaires 18
A New Era of Equity Creation 19
Building an Enterprising Society 19
xiii
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Chapter Summary 21
Study Questions 22
Internet Resources for Chapter 1 22
Mind Stretchers 22
Exercise 1: Visit with an Entrepreneur
and Create a Lifelong Learning Log 23
Exercise 2: The Venturekipedia
Exercise—Time Is Everything! 25
Case: ImageCafé 26
2 The Entrepreneurial Mind: Crafting a
Personal Entrepreneurial Strategy 35
Entrepreneurs Are Good Business
People 35
Three Principles for Entrepreneurial
Leadership 35
Converging on the Entrepreneurial
Mind 37
Desirable and Acquirable Attitudes,
Habits, and Behaviors 37
Seven Dominant Themes 37
Entrepreneurial Reasoning: The
Entrepreneurial Mind in Action 42
The Concept of Apprenticeship 43
Shaping and Managing an
Apprenticeship 43
Windows of Apprenticeship 44
The Concept of Apprenticeship:
Acquiring the 50,000 Chunks 45
Role Models 45
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xiv Table of Contents

Myths and Realities 45 Exercise 1: Crafting a Personal

What Can Be Learned? 47 Entrepreneurial Strategy 49
Exercise 2: Personal Entrepreneurial
Chapter Summary 48
Strategy 52
Study Questions 48
Case: Lakota Hills 73
Mind Stretchers 49

PART II
The Opportunity 85

3 The Entrepreneurial Process 87 4 Clean Commerce Is an Opportunity

Demystifying Entrepreneurship 87 Sea Change 111
Classic Entrepreneurship: Clean Commerce and the Sustainability
The Start-Up 87 Lens: Seeing and Acting on New
Entrepreneurship in Post–Brontosaurus Opportunities and Strategies 111
Capitalism: Beyond Start-Ups 87 Defining the Concept: How
“People Don’t Want to Be Managed. to Look through a Sustainability
They Want to Be Led!” 88 Lens 111
Signs of Hope in a Corporate Weak Ties 112
Ice Age 88 Systems Thinking 112
Metaphors 89 Thinking Like a Molecule 113
Entrepreneurship 5 Paradoxes 89 Illustrating the Concept:
The Higher-Potential Venture: Green Cleaning 113
Think Big Enough 91 Illustrating the Concept:
Smaller Means Higher Failure Odds 91 NatureWorks 114
Getting the Odds in Your Favor 93 The E-Factor 115
Threshold Concept 93 Drivers of New Entrepreneurial
Promise of Growth 93 Opportunities 115
Venture Capital Backing 93 Implications for 21st-Century
Entrepreneurs 116
Private Investors Join Venture
Capitalists 94 Chapter Summary 117
Find Financials Backers and Associates Study Questions 117
Who Add Value 94 Internet Resources for Chapter 4 118
Option: The Lifestyle Venture 94 Mind Stretchers 118
The Timmons Model: Where Theory and Case: Jim Poss 119
Practice Collide in the Real World 95
Intellectual and Practical Collisions 5 The Opportunity: Creating, Shaping,
with the Real World 95 Recognizing, Seizing 129
Value Creation: The Driving Think Big Enough 129
Forces 95 Transforming Caterpillars
Copyright © The McGraw-Hill Companies, Inc.

Change the Odds: Fix It, Shape It, into Butterflies 129
Mold It, Make It 95 New Venture Realities 129
Recent Research Supports The Circle of Ecstasy and the Food
the Model 101 Chain for Ventures 129
Chapter Summary 103 When Is an Idea an
Study Questions 103 Opportunity? 130
Internet Resources for Chapter 3 103 Spawners and Drivers of
Mind Stretchers 103 Opportunities 131
Case: Roxanne Quimby 104 Search for Sea Changes 132
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Table of Contents xv

The Role of Ideas 133 Exercise 3: Creative Squares 155

Ideas as Tools 133 Exercise 4: Idea Generation Guide 156

The Great Mousetrap Fallacy 133 Case: Burt’s Bees 158

Contributors to the Fallacy 134
Pattern Recognition 134 6 Screening Venture Opportunities 165

The Experience Factor 134 QuickScreen and Venture Opportunity

Screening Exercise 165
Enhancing Creative Thinking 135
Approaches to Unleashing Exercise 1: QuickScreen 166
Creativity 135 Exercise 2: Opportunity Concept and
Strategy Statement 168
Team Creativity 136
Exercise 3: The Venture Opportunity
Big Opportunities with Little Profile 170
Capital 136 Exercise 4: Opportunity-Shaping
Real Time 136 Research and Exercise 174
Relation to the Framework of Exercise 5: Customer Contact Research
Analysis 137 and Exercise 180
Screening Opportunities 138 Exercise 6: Mining the Value Chain—
Opportunity Focus 138 Defining the “White Space” 183
Exercise 7: Economics of the Business—
Screening Criteria: The Characteristics
How Do You Make Money in the White
of High-Potential Ventures 140 Space? 187
Industry and Market Issues 141 Exercise 8: Capital and Harvest—How
Economics 142 Will You Realize Dollars from the
Harvest Issues 143 Venture? 194
Competitive Advantage Issues 144 Exercise 9: Competitive Landscape—
Your Strategic Analysis 196
Management Team Issues 144
Exercise 10: Founders’
Personal Criteria 145 Commitment 205
Strategic Differentiation 146 Exercise 11: Flaws, Assumptions, and
Gathering Information 147 Downside Consequences—Risk
Finding Ideas 147 Reconsidered 207
Industry and Trade Contacts 148 Exercise 12: Action Steps—Setting a
Week-by-Week Schedule 209
Shaping Your Opportunity 149
Case: Globant 211
Published Sources 149
Guides and Company Information 149
7 Opportunities for Social
Additional Internet Sites 149
Entrepreneurship 223
Journal Articles via Computerized
What Is Social Entrepreneurship? 223
Indexes 149
Types of Social Entrepreneurship 223
Statistics 150
Social Purpose Ventures 223
Consumer Expenditures 150
Enterprising Nonprofits 225
Projections and Forecasts 150
Hybrid Models of Social
Market Studies 150
Entrepreneurship 226
Other Sources 150
The Timmons Model Interpreted for Social
Copyright © The McGraw-Hill Companies, Inc.

Other Intelligence 150 Entrepreneurship 227

Chapter Summary 151 Wicked Problems and Opportunity
Study Questions 152 Spaces 227
Internet Resources for Chapter 5 152 Resources 228
Mind Stretchers 152 The Importance of the Brain Trust in
Exercise 1: The Next Sea Changes 153
Social Entrepreneurship 231
Exercise 2: Opportunity-Creating Concluding Thoughts: Change Agent
Concepts and Quest for Breakthrough Now or Later? 231
Ideas 154 Chapter Summary 231
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xvi Table of Contents

Study Questions 232 The Dehydrated Business Plan 248

Internet Resources for Chapter 7 232 Who Develops the Business Plan? 248
Mind Stretchers 232 Segmenting and Integrating
Case: Northwest Community Ventures Information 248
Fund 233 Establishing Action Steps 248
Appendix A: Note on the Venture Preparing a Business Plan 249
Capital Investing Process 242 A Complete Business Plan 249
Chapter Summary 251
8 The Business Plan 245
Study Questions 251
Why Do a Business Plan? 245 Internet Resources for Chapter 8 251
Developing the Business Plan 245 Mind Stretchers 251
The Plan Is Obsolete at the Printer 245
Exercise 1: The Business Plan
The Plan Is Not the Business 246 Guide 252
Some Tips from the Trenches 246 Exercise 2: The Virtual Brain Trust 267
How to Determine If Investors Can Case: Newland Medical
Add Value 247 Technologies 269

PART III
The Founder and Team 277

9 The Entrepreneurial Leader and Can Ethics Be Taught? 316

the Team 279 Ethics Can and Should Be Taught 317
The Entrepreneurial Leader 279 The Entrepreneur’s Competitive Edge:
People Know Leaders When They The Art of Self-Assessment 317
Experience Them 279 The Usefulness of Academic
Stages of Growth 279 Ethics 318
A Theoretical View 279 Foundations for Ethical Decision
Managing for Rapid Growth 280 Making 318
What Entrepreneurial Leaders Applying the Foundations 320
Need to Know 282 Integrity as Governing Ethic 320
Other Leadership Competencies 283 Entrepreneurs’ Perspectives 320
Forming and Building Teams 286 The Fog of War and Entrepreneurship:
Rewards and Incentives: Slicing the A Unique Context 321
Founder’s Pie 286 Action under Pressure 322
An Approach to Rewards and Advice and Tips from the
Equity 287 Trenches 322
Considerations of Value 287 Thorny Issues for Entrepreneurs 323
Chapter Summary 288 Different Views 324
Study Questions 288 Problems of Law 324
Internet Resources for Chapter 9 289 Examples of the Ends-and-Means
Copyright © The McGraw-Hill Companies, Inc.

Mind Stretchers 289 Issue 324

An Example of Integrity 325
Exercise 1: Leadership Skills and
Know-How Assessment 290 The Ecological Stakeholder 325
Exercise 2: Slicing the Equity Pie 301 Chapter Summary 327
Case: Maclean Palmer 302 Study Questions 327
Internet Resources for Chapter 10 327
10 Ethical Decision Making and the Mind Stretchers 327
Entrepreneur 315 Exercise 1: Ethics 328
Overview of Ethics 315 Exercise 2: Ethical Decisions—What
Ethical Stereotypes 316 Would You Do? 332
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Table of Contents xvii

PART IV
Financing Entrepreneurial Ventures 333

11 Resource Requirements 335 Field Support 360

The Entrepreneurial Approach to Marketing, Advertising, and
Resources 335 Promotion 360
Bootstrapping Strategies: Marshaling and Supply 361
Minimizing Resources 335 Franchise Relationship Model 362
Building Your Brain Trust 336 Internet Impact: Resources 363
Using Other People’s Resources The Network Enhanced 363
(OPR) 336 Chapter Summary 364
Outside People Resources 337 Study Questions 364
Board of Directors 337 Internet Resources for Chapter 12 364
Alternatives to a Formal Board 339 Mind Stretchers 364
Attorneys 339 Case: Mike Bellobuono 365
Bankers and Other Lenders 340
Accountants 341 13 Entrepreneurial Finance 375
Consultants 342 Venture Financing: The Entrepreneur’s
Financial Resources 343 Achilles’ Heel 375
Analyzing Financial Requirements 343 Financial Management Myopia: It
Internet Impact: Resources 343 Can’t Happen to Me 376
Fund-Raising for Nonprofits 343 Critical Financing Issues 376
Chapter Summary 344 Entrepreneurial Finance versus
Study Questions 344 Corporate Finance 377
Internet Resources for Chapter 11 344 Determining Capital Requirements 378
Mind Stretchers 345 Financial Strategy Framework 378
Exercise 1: Build Your Brain Trust 345 Free Cash Flow: Burn Rate, Fume
Exercise 2: How Entrepreneurs Turn Less Date, and Time to Clear 379
into More 347 Crafting Financial and Fund-Raising
Case: Quik Lube Franchise Corporation Strategies 380
(QLFC) 348 Critical Variables 380
Financial Life Cycles 381
12 Franchising 353 International Finance and Trade 381
Introduction 353 Chapter Summary 383
Job Creation versus Wealth Study Questions 383
Creation 353 Internet Resources for Chapter 13 383
Franchising: A History of Mind Stretchers 383
Entrepreneurship 353 Case: Midwest Lighting, Inc. 384
Franchising: Assembling
the Opportunity 354
Copyright © The McGraw-Hill Companies, Inc.

14 Obtaining Venture and Growth Capital 395

Primary Target Audience 354
The Capital Markets Food Chain 395
Evaluating a Franchise: Initial Due
Diligence 356 Preserve Your Equity 396
Franchisor as the High-Potential Timing 397
Venture 356 Angels and Informal Investors 397
Key Components of a Franchise Who They Are 397
Offering 356 Finding Informal Investors 398
Service Delivery System 358 Contacting Investors 398
Training and Operational Evaluation Process 399
Support 359 The Decision 399
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xviii Table of Contents

Venture Capital: Gold Mines and The Theory of Company Pricing 434
Tar Pits 399 The Reality 435
What Is Venture Capital? 399 The Down Round or Cram-Down
The Venture Capital Industry 400 Circa 2002 436
The Booming 1990s 401 Improved Valuations by 2008 436
Beyond the Crash of 2000: The Venture Valuation Methods 436
Capital Cycle Repeats Itself 402 The Venture Capital Method 436
The Sine Curve Lives Circa 2005 404 The Fundamental Method 437
Venture Capital Investing Is Global 405 The First Chicago Method 437
Identifying Venture Capital Ownership Dilution 438
Investors 406 Discounted Cash Flow 438
Dealing with Venture Capitalists 408 Other Rule-of-Thumb Valuation
Questions the Entrepreneur Methods 439
Can Ask 409 Tar Pits Facing Entrepreneurs 439
Due Diligence: A Two-Way Street 409 Staged Capital Commitments 439
Other Equity Sources 410 Structuring the Deal 440
Small Business Administration’s What Is a Deal? 440
7(a) Guaranteed Business Loan
Understanding the Bets 441
Program 410
The Specific Issues Entrepreneurs
Small Business Investment
Typically Face 441
Companies 410
The Term Sheet 442
Small Business Innovation
Research 410 Sand Traps 442
Corporate Venture Capital 411 Strategic Circumference 442
Mezzanine Capital 411 Legal Circumference 443
Private Placements 411 Unknown Territory 443
Initial Public Stock Offerings 412 Chapter Summary 443
Private Placement after Going Study Questions 444
Public 414 Internet Resources for Chapter 15 444
Employee Stock Ownership Plans Wiki–Google Search 444
(ESOPs) 415 Mind Stretchers 444
Keeping Current about Capital Case: Lightwave Technology, Inc. 445
Markets 415
Chapter Summary 415 16 Obtaining Debt Capital 453
Study Questions 416 2007: Subprime Loans Submerge
Internet Resources for Chapter 14 416 Credit Markets 453
Wiki–Google Search 416 A Cyclical Pattern: Shades of
Mind Stretchers 416 1990–1993 453
Case: Forte Ventures 417 A Word of Caution 453
The Lender’s Perspective 454
15 The Deal: Valuation, Structure, Sources of Debt Capital 454
Copyright © The McGraw-Hill Companies, Inc.

and Negotiation 433 Trade Credit 456

The Art and Craft of Valuation 433 Commercial Bank Financing 456
What Is a Company Worth? 433 Line of Credit Loans 456
Determinants of Value 433 Time-Sales Finance 457
A Theoretical Perspective 433 Term Loans 457
Investor’s Required Rate of Chattel Mortgages and
Return (IRR) 433 Equipment Loans 458
Investor’s Required Share of Conditional Sales Contracts 458
Ownership 433 Plant Improvement Loans 458
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Table of Contents xix

Commercial Finance Companies 458 What to Do When the Bank Says

Factoring 459 No 468
Leasing Companies 460 Tar Pits: Entrepreneurs Beware 468
Before the Loan Decision 461 Beware of Leverage: The ROE
Approaching and Meeting the Mirage 468
Banker 462 IRS: Time Bomb for Personal
What the Banker Wants to Know 463 Disaster 468
The Lending Decision 465 Neither a Lender nor a Borrower Be,
But If You Must . . . 469
Lending Criteria 466
Chapter Summary 469
Loan Restrictions 466
Study Questions 470
Covenants to Look For 466
Internet Resources for Chapter 16 470
Personal Guarantees and the
Loan 466 Wiki–Google Search 470
Building a Relationship 467 Mind Stretchers 470
The TLC of a Banker or Other Case: Bank Documents: “The Devil Is in
Lender 467 the Details” 471

PART V
Start-up and Beyond 491

17 Leading Rapid Growth, Crises, The Threat of Bankruptcy 500

and Recovery 493 Voluntary Bankruptcy 501
Inventing New Organizational Involuntary Bankruptcy 501
Paradigms 493 Bargaining Power 501
Entrepreneurial Leaders Are Not Intervention 502
Administrators or Managers 493 Diagnosis 502
Leading Practices of High-Growth The Turnaround Plan 503
Companies 493 Longer-Term Remedial
Growing Up Big 494 Actions 504
Stages of Growth Revisited 494 The Importance of Culture and
Core Leadership Mode 494 Organizational Climate 505
The Problem in Rate of Growth 495 Six Dimensions 505
Getting into Trouble—The E-Leadership 505
Causes 498 Entrepreneurial Leadership for the 21st
Strategic Issues 498 Century: Three Breakthroughs 506
Leadership Issues 499 Ewing Marion Kauffman and
Poor Planning, Financial/Accounting Marion Labs 507
Systems, Practices, and Controls 499 Jack Stack and Springfield
Getting Out of Trouble 499 Remanufacturing Corporation 507
Copyright © The McGraw-Hill Companies, Inc.

Predicting Trouble 499 Ralph Stayer and Johnsonville

Net-Liquid-Balance-to-Total-Assets Sausage Company 507
Ratio 499 The Chain of Greatness 509
Nonquantitative Signals 500 Chapter Summary 509
The Gestation Period of Crisis 500 Study Questions 510
The Bloom Is Off the Rose—Now Internet Resources for Chapter 17 510
What? 500 Mind Stretchers 510
Decline in Organizational Case: Telephony Translations,
Morale 500 Inc. (A) 511
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xx Table of Contents

18 The Family as Entrepreneur 525 Chapter Summary 541

Families, Entrepreneurship, and the Study Questions 541
Timmons Model 525 Internet Resources for Chapter 18 542
Building Entrepreneurial Family Mind Stretchers 542
Legacies 525 Exercises 543
Large Company Family Legacies 525 Mind-Set Continuum 543
Smaller and Midsized Family Methods Continuum 543
Legacies 527 Family Enterprising Model 544
The Family Contribution and Familiness f1 f2 Continuum 544
Roles 528 Case: Indulgence Spa Products 546
Frame One: The Mind-Set and Method Appendix A 554
for Family Enterprising 531 Appendix B 555
Enterprising Mind-Set and
Methods 532 19 The Harvest and Beyond 559
Creating the Dialogue for A Journey, Not a Destination 559
Congruence 534 Wealth in Families 559
Frame Two: The Six Dimensions for The Journey Can Be Addictive 559
Family Enterprising 535 First Build a Great Company 560
Leadership Dimension: Does Your Create Harvest Options and Capture
Leadership Create a Sense of the Value 560
Shared Urgency for Enterprising A Harvest Goal: Value Realization 561
and Transgenerational Wealth
Crafting a Harvest Strategy:
Creation? 536
Timing Is Vital 561
Relationship Dimension: Does Your
Harvest Options 562
Family Have the Relationship Capital
to Sustain Their Transgenerational Capital Cow 562
Commitments? 536 Employee Stock Ownership Plan 562
Vision Dimension: Does Your Family Management Buyout 562
Have a Compelling Multigenerational Merger, Acquisition, and Strategic
Vision That Energizes People at Every Alliance 562
Level? 537 Outright Sale 563
Strategy Dimension: Does Your Family Public Offering 563
Have an Intentional Strategy for Wealth-Building Vehicles 564
Finding Their Competitive Advantage
The Road Ahead: Devise a Personal
as a Family? 537
Entrepreneurial Strategy 564
Governance Dimension: Does Your
Goals Matter—A Lot! 564
Family Have Structures and Policies
That Stimulate Change and Growth in Chapter Summary 565
the Family and Organization? 538 Study Questions 565
Performance Dimension: Does Your Internet Resources for Chapter 19 565
Performance Meet the Requirements Mind Stretchers 565
for Transgenerational Entrepreneurship Exercise: “Wisdom from the
and Wealth Creation? 538 Harvest” 566
Copyright © The McGraw-Hill Companies, Inc.

Frame Three: The Familiness Advantage Case: Optitech 568

for Family Enterprising 538
Conclusion 541 Index 579
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PA RT O N E
A t the heart of the entrepreneurial process is the founder: the
seeker, creator, and initiator behind the start-up. Without this
human energy, drive, and vitality, the greatest ideas will never
come to fruition. Just like in business, musical, scientific, or
athletic talent does not mean success without high ambitions
and the intangibles of creativity, ingenuity, commitment, tenac-
ity, determination, and a passion to win.
So what is it that an aspiring entrepreneur needs to know?
What habits, attitudes, and mind-sets can be learned, prac-
ticed, and developed in order to improve the odds of success?
This ninth edition focuses on you—the aspiring entrepreneur.
We examine the mind-sets, attitudes, and habits that lead to
entrepreneurial success—and failure. By examining patterns
Copyright © The McGraw-Hill Companies, Inc.
and practices of entrepreneurial thinking and reasoning, and
the entrepreneurial mind in action, you can begin your own
assessment and planning process to get you headed where
you want to go. This personal entrepreneurial strategy will
evolve into your personal business plan—a blueprint to help
you learn, grow, attract mentors who can change your life and
your ventures, and pursue the opportunities that best suit you.
1
Volume/207/es/MH01495/spi29104_disk1of1/0078029104/spi29104_pagefile
The Founder
Survival odds for a venture go up once you reach the
benchmark of $1 million in sales and 20 employees. Starting
or acquiring a business that exceeds these levels is more fun
and challenging than being involved in small one- or two-
person operations. Importantly, a business of this magnitude
achieves the critical mass necessary to attract good people
and significantly increases the likelihood of success.
It is impossible to give people a test to determine who’s
an entrepreneur. Rather, it is useful for would-be entrepre-
neurs and others involved in entrepreneurship to study how
successful entrepreneurs think, feel, and respond and use
these attributes as pattern recognition for successful entrepre-
neurs and companies.
Take, for example, Rick Adam, who by the late 1990s had
made his fortune as a software entrepreneur. He had also
spotted a compelling opportunity in the general aviation indus-
try. As an avid pilot, Adam knew firsthand how few new air-
craft designs were available—at any price. The reason was
that the cost to design, engineer, and bring to market an FAA-
certified general aviation product was estimated by industry
spi29104_ch01_001-034.indd Page 2 07/10/11 2:50 PM user-f466
2 Part I
veterans to be in the neighborhood of $250 million and a
time frame of 10 years. Despite having no previous experi-
ence in manufacturing, Adam put up tens of millions of his own
money to start up Adam Aircraft. Using sophisticated model
fabrication technology, and by applying design and engineer-
ing practices Adam had mastered in software development,
his company spent under $60 million to develop the A-
500—a sleek, pressurized twin-engine design that achieved
FAA certification in just five years. Their A-700 prototype—a
personal jet that utilized the same airframe structure—was fly-
ing for another $20 million. By the fall of 2007, the A-700
was nearing FAA certification, and the company was report-
ing an order backlog for the jet of just under $800 million.
Rick Adam commented on the endeavor:
I’ve done a lot of entrepreneurial things, and when
you think there is a big opportunity, you look at it
thoughtfully and you say, well, if this is such a big
opportunity, why isn’t anybody taking it? What do I
know, or what do I see that nobody else is seeing?
So, very often, entrepreneurial opportunities occur
Volume/207/es/MH01495/spi29104_disk1of1/0078029104/spi29104_pagefile
The Founder
because a series of events come together—particularly
with technology—and you suddenly have all the ingre-
dients you need to be successful at something that just
moments ago was impossible. Then, assuming you are
a good business person and a good executer, you
can get there if you focus, and keep at it.
It makes a lot of sense for entrepreneurs to pay particular
attention to picking partners, key business associates, and
managers with an eye for complementing the entrepreneurs’
own weaknesses and strengths and the needs of the venture.
As will be seen, they seek people who fit. Not only can an
entrepreneur’s weakness be an Achilles’ heel for new ven-
tures, but also the whole is almost always greater than the
sum of its parts.
Finally, ethics are terribly important in entrepreneurship. In
highly unpredictable and fragile situations, ethical issues
cannot be handled according to such simplistic notions as
“always tell the truth.” It is critical that an entrepreneur under-
stand, develop, and implement an effective integrity strategy
for the business.
Copyright © The McGraw-Hill Companies, Inc.
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1
Chapter One

The Global Entrepreneurial

Revolution for a Flatter World
Entrepreneurship Flattens the World Tejada, has created Hotelmovil. The first
five units will roll out of a factory in Italy
In 2011 there were 2.1 billion Internet users in the and will sell for $500,000 a unit or rent for
world and only 13 percent of the total were in the $8,000 per week.
United States.1 In the United States an iPod was sold In Norway, entrepreneur Jan-Olaf Willums,
every eight seconds. Entrepreneurship and the In- already wealthy from his investment in REC,
ternet continue to flatten the world at a staggering a solar energy company, is leading the devel-
pace and in the process are spawning fertile fields of opment of a Web-enabled, carbon-free electric
opportunities that are being tilled and seized on car he calls Think. He has teamed with Segway
every continent. How is this global revolution mani- creator Dean Kamen, Google founders
festing itself? Larry Page and Sergey Brin, and Silicon
For starters, Exhibit 1.1 shows just how far inter- Valley and European investors to raise $78
national Web entrepreneurs have penetrated the million. His vision: Upend the century-old
world. This remarkable array of 39 Web clone fossil fuel-based automotive paradigm by
knockoffs of leading websites represents just a tiny changing how cars are made, sold, owned,
tip of the worldwide iceberg of Internet entrepre- and driven.
neuring. While the Internet alone is reshaping the “Anything seems possible in Rwanda,” asserts
world in staggering ways, the spread of global former San Francisco resident Josh Ruxin, who,
entrepreneurship reaches far beyond. Consider, for with his wife Alissa, has invested life savings of
example: $100,000 to build the Heaven Café in the
capital city of Kigali. The African nation of
In 2010, immigrants working in the USA sent
8 million—ravaged by the genocide of 1 million
over $50 billion back to their families.2 Sahara
people in 1994—is now attracting foreign
House Care, a firm in India, has tapped into
entrepreneurs in tourism, telecom, mining,
that market by providing 60 products and
farming, and real estate.
services immigrants can buy for their families.
These include such services as delivering Everyone is now aware of just how dynamic
flowers, finding buyers for real estate, offering and entrepreneurial the Chinese economy has
exhaustive online catalogs of just about become in recent years. Consider the following
anything, and even accompanying loved ones examples of explosive growth. In 2004 the
Copyright © The McGraw-Hill Companies, Inc.

to a hospital. authors of this text wrote, “Computer usage

increased from 2.1 million in 1999 to 68 million
Consider a new supersize RV built on an
in 2004—a 34-fold increase!” Seven years later
18-wheeler chassis turned into a mobile hotel
we can report usage is nearing 1 billion.3
facility that can sleep as many as 44 people.
According to Volkswagen, Chinese automotive
A 36-year-old Spaniard, Fernando Saenz de
1
http://www.internetworldstats.com/stats.htm.
2
http://www.internetworldstats.com/stats.htm/01/payback-time/.
3
http://www.washingtontimes.com/news/2009/jul/01/payback-time.html; http://www.inc.com/news/articles/200707/computers.html.

3
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4 Part I The Founder

EXHIBIT 1.1
Send in the Clones

digg Facebook LinkedIn YouTube

Brazil Linkk — — Videolog
linkk.com.br videolog.uol.com.br
China Verydig Xiaoneiwang Wealink 56.com
verydig.com xiaonei.com wealink.com 56.com
France Scoopeo Skyrock Viadeo Dailymotion
scoopeo.com skyrock.com viadeo.com dailymotion.com
Germany Yigg StudiVZ Xing MyVideo
yigg.de Studivz.net xing.com myvideo.de
India Best of Indya Minglebox Rediff Connexions Rajshri
bestofindya.com minglebox.com connexions.rediff.com rajshri.com
Israel Hadash Hot Mekusharim Hook Flix
hadash-hot.co.il mekusharim.co.il hook.co.il flix.co.il
Mexico Enchilame Vostu InfoJobs BuscaTube
enchilame.com vostu.com infoJobs.com.mx buscatube.com
Netherlands eKudos Hyves — Skoeps
ekudos.nl hyves.net skoeps.nl
Russia News2 V Kontakte MoiKrug Rutube
news2.ru vkontakte.ru moiKrug.ru rutube.ru
South Africa Muti — — MyVideo
muti.co.za myvideo.co.za
Turkey Nooluyo Qiraz Cember Resim ve Video
nooluyo.com qiraz.com cember.net resimvideo.org

Source: Business 2.0. ©2007 Time Inc. All rights reserved.

production in 2003 was 4.44 million and grew
to over 13 million by 2010. From 1998 to 2004,
mobile phones exploded from around 10 million
to over 350 million. In 2011 there are almost
900 million mobile phones in China.
Sensing this huge growth in opportunities, numerous
leading U.S. venture capital firms—including IDG
Ventures, Venrock, and Kleiner, Perkins, Caufield &
Byers—have established relationships and operations
in China and made many successful (and some not so
successful) investments. These are but a few exam-
ples of the entrepreneurial surge in China. A similar
pattern is now emerging in India and other Southeast
Asian nations. In India and Vietnam, for example,
IDG has dedicated venture capital funds, and other
firms are getting established as well.
commentary and arguments for entrepreneurship.
The awarding of this prize in economics to Professor
Phelps is the most important academic recognition of
the field and subject in our lifetime. One of Phelps’s
main arguments is that “entrepreneurship is lucrative—
and just.” This is an important point; we will see later
in this chapter how entrepreneurs are the leading
philanthropists of our time. He further made his case:
“Instituting a high level of dynamism, so that the
economy is fired by the new ideas of entrepreneurs,
serves to transform the workplace in the firms devel-
oping an innovation and also the firms dealing with
the innovation.”
The ink was barely dry on this announcement
when the Nobel Peace Prize was announced for an-
other economist championing micro-enterprise.
Farid Hossain of the Associated Press wrote the story
in the Manchester, New Hampshire, Union Leader
Copyright © The McGraw-Hill Companies, Inc.

on October 14, 2006: “A simple yet revolutionary

Two Nobel Prizes Recognize
Entrepreneurship
The front page of The Wall Street Journal on October
10, 2006, had the following stunning headline: “The
New Nobel Prize Winner Makes a Case for Entre-
preneurship.” The accompanying article by Professor
Edmund S. Phelps of Columbia University, New
York, the prize recipient, was full of wonderful
idea—in the form of a $90 loan—changed her life,
putting the Bangladeshi villager out of a devastating
cycle of poverty. Yesterday, that idea—lending tiny
sums to poor people looking to escape poverty by
starting a business—won the Nobel Peace Prize for
economist Muhammad Yunus and the Grameen
Bank he founded.” Hossain noted the Nobel Com-
mittee’s rationale at the citation: “Lasting peace
cannot be achieved unless large population groups
Another random document with
no related content on Scribd:
Prince’s; Masters governing themselves in purchasing, according to
the Course they design to steer.
This Food is accounted more salutary to Slaves, and nearer to
their accustomed way of Feeding than salt Flesh. One or other is
boiled on board at constant times, twice a day, into a Dab-a-Dab[33]
(sometimes with Meat in it) and have an Overseer with a Cat-of-nine-
tails, to force it upon those that are sullen and refuse.
The further Management and Caution to be taken with Slaves on
board, till their delivery in the West-Indies, I shall intermix with what I
know of the method of Trade at Whydah, and Angola, because
Cautions where a Cargo is of one Language, is so much the more
requisite.
Whydah is the greatest trading Place on the Coast of Guinea,
selling off as many Slaves, I believe, as all the rest together; 40 or 50
Sail (French, English, Portuguese, and Dutch) freighting thence
every year. The King is absolute as a Boar; making sometimes fair
Agreements with his Country Neighbours, it being often the Interest
of Traders to be honest (perhaps the only reason that makes them
so) but if he cannot obtain a sufficient number of Slaves that way, he
marches an Army, and depopulates. He, and the King of Ardra
adjoining, commit great Depredations inland.
On the Ships he lays these Impositions, and to prove his Folly,
does it mostly for the benefit of those that rule him; First, of having
the Refusal of all Goods; Secondly, the Value of twenty Slaves from
every Ship, small or great, as a Duty; and Thirdly, forces his own
upon them at an advanced Price.
The French, Dutch, and English, have each a House, or mud Fort,
about three Miles from the Sea, keeping Tents at the Beach for the
convenient receiving and securing their Cargoes as it comes from
the Ship, and transmitting the Returns; which, by a dangerous
double Barr upon the Coast, is rendred impassable sometimes (by
the alteration of the Winds) for a fortnight together; the Negroes only
know how to paddle thro’ it, and when they think it safe, a Signal is
made to the Ships, from those Tents, by hoisting their Flags.
 The chief of either Factory that gets first on board any Ship coming
into the Road, has a right to serve her with Boats and Servants, and
has a Due of seven Slaves for it.
The Commanders, with their Surgeons, (as skilled in the Choice of
Slaves) attend the whole time on shore, where they purchase, in
what they call a fair open Market.
The Mates reside on board, receiving from time to time their
Master’s Directions as to the Goods wanted, and to prepare the Ship
for the Reception and Security of the Slaves sent him; where this is a
Rule always observed, to keep the Males apart from the Women and
Children, to handcuff the former; Bristol Ships triple such as are
sturdy, with Chains round their Necks; and to keep your own Men
sober, and on a barricado’d Quarter-deck: tho’ the natural Cowardice
of these Creatures, and no other Prospect upon rising, but falling into
the hands of the same Rogues that sold them, very much lessens
the Danger: Nevertheless, it is adviseable at all times, to have a
diligent Watch on their Actions, yet (abating their Fetters) to treat
them with all Gentleness and Civility.
At Angola, the first Man is the King, the second, Mabuca, third,
Mafucar, fourth, Machangee, fifth, Captain More, and the sixth,
Madam Barsse; Names expressive of some [34]Virtue; and where
they chuse a white Man’s, (common at many parts of the Coast) it is
from the Qualities they admire in such, and strive to imitate.
Here they force about twenty Servants, which the Ship is obliged
to pay, after the rate of six Fathom of Guinea Cloth per month, and
every Sunday Morning, two Knives to each of them.—Their Business
is to attend every Morning, and carry up your Goods safe to the
Factory, where others take the Charge, and are accountable for all
Losses.
The Bum-boy again supervises the Slaves, to do justice between
Buyer and Seller, and by the Custom or Law of the Country, the Ship
is to stand charged with neither them or other Effects, till delivered
into the Boat. However, considering what are their Courts of Justice,
it will behove all Masters to have a diligent Inspection upon the
Slaves themselves, and to keep good Locks and Bolts upon their
Goods: for it is here, as at Whydah, the commonest People, who
cannot arrive at, or forbid Trade, are all Thieves and Beggars, the
King and Courtiers chief, but openly more honest, because they get
more by it.
Your Gold-takers are, Peter Griffin, (the King’s Brother-in-law)
Thomas Boon, and John Brown. Sometimes Ships settle an Agency
at Mumbalar, or other neighbouring Place, and get considerable
Trade; I have known 70 Slaves purchased there in a Month, with the
additional Duty of six Pieces, and giving to the Servants who fetched
up the Goods, each a single Annabass, a bundle of Beads, three
Knives, and a Dram: with all, let your Agreements be as positive as
possible, for they are very difficultly kept to their Words.
When we are slaved and out at Sea, it is commonly imagined, the
Negroes Ignorance of Navigation, will always be a Safeguard; yet, as
many of them think themselves bought to eat, and more, that Death
will send them into their own Country, there has not been wanting
Examples of rising and killing a Ship’s Company, distant from Land,
tho’ not so often as on the Coast; but once or twice is enough to
shew, a Master’s Care and Diligence should never be over till the
Delivery of them. Some Negroes know well enough, that the
preserving one white Man may answer their Purpose in an
Exchange; however, generally speaking, we allow greater Liberty in
our Passage, as conducive to their Health; we let them go at large
on the Ship’s Deck, from Sun-rise to Sun-set, give such as like it,
Pipes and Tobacco, and clean and air their Dormitories every day.
Having given my Sentiments of the way and method of Trade at
different parts of the Guinea Coast, I have still some remaining
Observations to make under the chief Articles of it, viz. Slaves, Ivory,
and Gold.
 S L AV E S .
Slaves become so (we are told) in this Country, by War, by Mulcts on
some particular Crimes, or Debts which they are unable to
discharge; and they are bought by us (some say) not as Merchants,
but Christians, to preserve them from Sacrifice and Cannibals, to
convey them to a Land flowing with more Milk and Honey, to a better
Living, better Manners, Virtue, and Religion; let us examine each of
these Pretences.
First, the Negroes. By War for the most part is meant Robbery of
inland, defenceless Creatures, who are hurried down to the Coast
with the greater Cruelty, as it is from a contented, tho’ a very poor
Life. Trade has improved the Robbers, but as all are not alike expert,
or alike Villains, it is alterable, ebbs and flows, and at some places
we have never yet had any.
2. The Negroes become Slaves to one another, by Mulcts imposed
on some sort of Crimes, or Debts contracted beyond their Ability to
discharge. Few come to us this way; for tho’ much Artifice and
Revenge might mix in their Palaavers (Justiciary Courts) yet their
Jurisdiction extends not beyond their own Towns, when Self-
preservation will teach them more regard to Justice for their own
sakes, lest the Relations of those sentenced should revenge it, and
also because the Barbarity would encrease an Enmity to the Rulers,
the Punishment falling on Neighbours of the same Country,
Complexion, Language, and Religion.
We who buy Slaves, say we confer a Good, removing them to a
better state both of Temporals and Spirituals; the latter, few have the
Hypocrisy (among us) to [35]own, and therefore I shall only touch on
the former.
 They live indeed, according to our European Phrase, very poor
and mean, destitute almost of the common Necessaries of Life; but
never starve, that is peculiar to trading Republicks; then who is judge
of their Wants, themselves, or we? Or what does Poorness mean?
more than a sound, to signify we have that which another does not
want. Do not many men in politer Nations, renounce the World for
Cloisters and Desarts, and place a greater happiness in preserving
their Innocence, than enjoying even the Necessaries of Life; nay,
often ravished with the neglect of them. Wherever therefore
Contentment can dwell, tho’ under the meanest Circumstances, it is
a barbarous Corruption to stile such poor, for they have every thing
they desire, or, which is much the same, are happily ignorant of any
thing more desirable.
To remove Negroes then from their Homes and Friends, where
they are at ease, to a strange Country, People, and Language, must
be highly offending against the Laws of natural Justice and
Humanity; and especially when this change is to hard Labour,
corporal Punishment, and for Masters they wish at the D——l.
We are Accessaries by Trade, to all that Cruelty of their
Countrymen, which has subjected them to the Condition of Slaves,
little better in our Plantations, than that of Cattle; the Rigour of their
usage having made some hundreds of them at Jamaica run away
into barren Mountains, where they chuse to trust Providence with
their Subsistance, rather than their Fellow-Christians (now) in the
Plantations.
Slaves differ in their Goodness; those from the Gold Coast are
accounted best, being cleaned limbed, and more docible by our
Settlements than others; but then they are, for that very reason,
more prompt to Revenge, and murder the Instruments of their
Slavery, and also apter in the means to compass it.
To Windward they approach in Goodness as is the distance from
the Gold Coast; so, as at Gambia, or Sierraleon, to be much better,
than at any of the interjacent places.
To Leeward from thence, they alter gradually for the worse; an
Angolan Negro is a Proverb for worthlessness; and they mend (if we
may call it so) in that way, till you come to the Hottentots, that is, to
the Southermost Extremity of Africa.
I have observed how our Trading is managed for Slaves, when
obliged to be carried on aboard the Ship.—Where there are
Factories, (Gambia, Sierraleon, the Gold Coast, Whydah, Calabar,
Cabenda, and Angola,) we are more at large; they are sold in open
Market on shore, and examined by us in like manner, as our Brother
Trade do Beasts in Smithfield; the Countenance, and Stature, a
good Set of Teeth, Pliancy in their Limbs and Joints, and being free
of Venereal Taint, are the things inspected, and governs our choice
in buying.
The bulk of them are country People, stupid as is their distance
from the Converse of the Coast-Negroes, eat all day if Victuals is
before them; or if not, let it alone without Complaint; part without
Tears with their Wives, Children, and Country, and are more affected
with Pain than Death: yet in this indocile State, the Women retain a
Modesty, for tho’ stripped of that poor Clout which covers their
Privities (as I know the Whydahs generally do) they will keep
squatted all day long on board, to hide them.
Whydah Slaves are more subject to Small-Pox, and sore Eyes;
other parts to a sleepy Distemper, and to Windward, Exomphalos’s.
There are few Instances of Deformity any where; even their Nobles
know nothing of chronical Distempers, nor their Ladies, of the
Vapours. Their flattish Noses are owing to a continued grubbing in
their Infancy against their Mother’s Backs, being tied within the
Tomee, whether upon Travel or Business, for a year or two, the time
of their sucking.
 I V O R Y.
Ivory is a Commodity sold all the Coast over, but, like the Slaves,
more in some parts than others, and supplied thence to all the
Western World. It is in Teeth or Screvelios. The Teeth are the large,
weighing from 30 to an hundred weight, are worth double the other
at home; these selling for ten or twelve pounds, when those do not
for above 5l. a hundred.
The Screvelios are small, from fifteen down to four Pounds weight;
among these last are sold us to Windward, the Teeth of the
Hippopotamus, or Sea-Horse, catched in the Rivers Nunes and
Gambia, about 16 Inches long, a white Ivory, but so brittle as not to
be easily worked.
The Rule upon the Coast is, that when four will weigh an hundred
weight, they shall all be accounted Teeth, and paid for as such, tho’
one or two of them be never so small; for the more Teeth encrease in
their weight, the better the Ivory, and makes amends for the
smallness of the other.
At Gambia, the points of them are often found broken, from the
Elephant’s grubbing against rocky Ground; at other times, you see
them flawed, or they are light in proportion to their bigness,
Circumstances that abate their value.
I have been often ruminating, how the trading Negroes come by
these Elephants Teeth, and find they exchange our European
Commodities with the inland Natives for them; but whether they
again shoot the Elephants, or find their Teeth in travelling through the
Woods and Desarts, is uncertain. Their Rivers and Canoos indeed,
help to extend their Knowledge a vast way through the Country, and
there are some Accounts that tell us, the Negroes scituated upon
these Rivers (like the Americans) make Excursion, or Voyages of a
month or two, from their Habitations.
Mr. Plunket of Sierraleon, and others of above twenty years
experience in those parts, have informed me, that Elephants move
and change their Pasture in very large Herds; that they have seen
Droves upon the Banks of the Gambia, of a thousand and fifteen
hundred together; that they are bold, have a tough Case, forage less
than Horses, and look out much better: from the Circumstance of
number, and boldness of their March (said to be in a line) they seem
secured from any attacks of the timorous Natives, who must come
very near, or their Skin is impenetrable by Fire-arms. Besides, Ivory
was the Trade of Guinea, before the use of them, to which I may
add, the weighty Teeth come to Sale in a less number than the
Screvelios; altogether persuading me, they are not shot, but that the
larger Size are Teeth of Elephants who have died naturally, and
which being grown to their utmost Perfection and Solidity, withstand
a very considerable Elapse of time, without decay or mouldering;
and that the Screvelios are probably such as are shed when young,
the like as we meet in the human Species, or as Bucks do their
Horns, which the Natives by practice know where to look for.
 GOLD.
The Gold of Guinea is mostly traded for at the Gold Coast (thence
denominated) and is either in Fetish, in Lump, or in Dust.
The Fetish-Gold is that which the Negroes cast into various
Shapes, and wear as Ornaments at their Ears, Arms, and Legs, but
chiefly at their Head, entangled very dextrously in the Wool; it is so
called, from some Superstition (we do not well understand) in the
Form, or in their Application and Use, commonly mixed with some
baser Metal, to be judged of by the Touch-Stone, and skill of the
Buyer you employ.
The Lump, or Rock Gold, is in pieces of different weights,
pretended to be brought our of Mines. I saw one of these which Mr.
Phips had at Cape Corso, weighing thirty Ounces, they are always
suspected to be artificial, and by the cunning Fellows in Trade, cast
so, to hide some baser mixture of Silver, Copper or Brass: wherefore
it is not safe trusting to the antique, dirty look, but to cut or run it for
satisfaction.
Dust Gold is the common Traffick, the best comes hither from the
neighbouring inland Kingdoms of Dinkira, Akim, and Arcana, and is
got (we are told) out of the River-Sands. Tagus in Portugal was once
so famed;
Omnis arena Tagi, quodque in mare volvitur aurum.
Juvenal. Satir. 3.
The Natives dig Pits nigh the Water-falls of Mountains abounding
with this Metal; the Ponderosity of their Particles sinking them there:
and then with incredible Pains and Industry, they wash the Earth and
Sand in Trays and Vessels till it all swims off, and they espy at
bottom now and then two or three shining Grains of Gold that pays
them (without great Fortune) only as Labourers.
 This is the most probable Account, how they come by their Gold
on this Coast: For if it were through Mines, and from Kingdoms so
nearly bordering on our Factories as Arcana (whence the best and
purest) it would long since, I imagine, have tempted us, or the Dutch
to have dispossessed the Natives, and worked them solely to our
own use.
Gold Dust is not gathered at any part of the same River, it’s said,
but at convenient Spots nearest the Mountains; because when too
distant from the Floods that wash through Mines, their Weight buries
them too deep, or disperses their Particles too widely, to answer the
Labour of Searching.
Masters of Ships customarily hire a Native, at so much per month,
for this part of the Trade; he has a quicker sight at knowing, and by
Practice, readier at separating the drossy and false Gold, with which
the true has ever some Mixture, to impose on unskilful People. This
impure Stuff is called Crackra, a Pin or brass Dust, current upon the
Gold Coast among themselves, but is a gross Cheat in Traffick,
some of it is very bad.
The way to separate, is by copper Blow-pans, shaped like Fire-
Shovels; into this your Gold-taker throws three or four Ounces at a
time, and by gently tossing, and blowing upon it, the lightest being
the false, flies off: the larger Grains he discriminates by his sight, and
separates by his Fingers with a wonderful dexterity.
Their way of counting Gold at the Factories, is by Ounces,
Bendees, and Marks, lesser are Dumbays, and Doccys, or Toccus;
12 of this, or 24 of that, make an Accy, (about 5s.)
All reserve it in Leather Pouches, and at London, the Gold-Smith
runs it down in a [36]Crucible at two pence per Ounce; it’s kept
dissolved for the Evaporation of Dross, (perhaps one Ounce in a
hundred) and then cast into a solid Bar; a Chip from it he sends to
the Assay-master in the Tower, who by his Office is Judge, and on a
small Fee, signs back a Note of it’s Value, that is, how much above,
or under Sterling; and so amounts to a Shilling or two over or under
4l. a Troy Ounce.
 Our Return upon the Gold Coast.
At our coming hither in October 1721, we understood every where
that the Pyrates under the Command of Roberts, had been
plundering the Ships down the whole Coast, but were then supposed
gone off: the latest Account of any who had suffered, being in August
last. We therefore, under no Apprehension of their Return, divided
the Provisions had been sent hither from England to us, and leaving
the Weymouth (the worst disabled Ship of the two) in Cape Corso
Road, stretch’d away to Windward again, the Beginning of
November, in order to mann, by the Purchase of Slaves, and
impressing Sailors from the Merchant Vessels; the latter we had little
Occasion of, their ill Treatment, and bad Diet (or a Pretence of it)
making them all Volunteers that could be spared.
At Succonda we heel’d and scrubbed Ship, a Ledge of Rock
shooting from the western Point nigh a League, making it a smoother
Sea than any of the neighbouring Places; and this little Check given
to the Water, we observed, made the Bay flow a foot or two higher
than any part of the plain Coast.
At Dixcove, the Windermost of our Gold-Coast Factories, we
heard by the Carlton, that the Soldiers who had come out under our
Convoy for the African Company’s Service at Gambia, had unhappily
mutiny’d with Captain Massey one of their Officers; disdaining the
bad usage of the Merchants who had the Command and Victualling
of them, they spiked up the Guns, and retir’d to the Ship which had
brought them over, (the Bumper) and there by a joint Consent of
George Lowther the second Mate, and some of the Sailors,
proceeded to Sea; the Effect of which, see in the History of the
Pyrates.
At Apollonia we found all our old Acquaintance were gone: The
Queen that had two or three Months ago sent off a Dashee of four
Accys, was lately, with her People, forced to move to Assinee.
There are a numerous People called Santies, or Assanties,
extending a long way on the back of them, who derive a
considerable Trade to the Coast, particularly at Anamaboo. This
Nation, provoked by the frequent Depredations and Panyarrs of the
Apollonians, had lately been down and drove them from their
Habitations; tho’ themselves, unwilling to own the Roguery, say it
has proceeded from the Instigation of Jan Conny their Neighbour
and Competitor. At Assinee therefore, we found them preparing to
revenge this Injury, buying up all our trading Arms at a good Price,
and giving a Fowl for every Flint we could spare, (there being no
such thing in the Country.) They are as fearless as any of the Colour,
both in Trade and War, and promise themselves an Amendment of
their Fortune, which, by accounts since, I hear they have
accomplished against Conny.
At Cape Three Points we found our Water-Pond almost dried up,
tho’ the Wind at S. E. had lately brought on two or three heavy
Showers of Rain, and they failing, constant thick Fogs in the day,
and what is very unusual at the distance we anchor, Dews in the
night on board: The Current to Westward. In this Bay, two or three
Evenings running, we saw a monstrous Fish heavily moving about
the Ship, divided into eight or ten different Parts, each as large as a
Thornback, sinking immediately at the throwing over a Hook; the
Sailors call it a Devil-Fish. Fire-Flies also, (common to warm
Latitudes,) flew about in the night; an Insect that makes the like light
in the Air, as Glow-Worms on the Ground.
What I shall farther observe from this Cruise or the Circuit we have
made, I never yet met either of those useful Animals, a Dog or a
Horse, among the Natives; the latter, Bosman (who writes of Guinea)
says, are numerous in-land; and of the other, their Bark turns to a
Howl in three or four Broods, their Ears and Colour inclining to a Fox.
Those I have seen, and not hitherto mentioned, are, among
Quadrupeds, the Cat, Hare, Rat, Lizzard, Boar, Porcupine, Civet-
Cat, Camelion, and Petto or Sluggard, from the Slowness of his
March; he will grow lean in the time he takes to ascend a Tree, and
never comes down till he has devoured all the Fruit. Birds, the
Parrot, Paraquet, Pheasant, Partridge, Wild-Duck, Turtle-Dove,
Snipe, Kite, and others. Fish, the Jack, Plaise, Sole, Bream,
Thornback, Dab, Lobster, Crab, Shrimp, &c. Reptiles, the Toad,
Scorpion, Centipes.
 P Y R AT E S .
As Roberts the Pyrate, by the bold Sweep made in August, had
struck a Pannick into the Traders, we were several times in our late
Cruise alarmed with Stories of their being again to Windward; which
kept us Plying, till others contradicting such Report, and considered
with the rashness of the Attempt, returned us to our Rendesvouz in
Cape Corso Road, where we had scarce well arrived, before Mr.
Phips received Intelligence by two or three Canoos dispatched to
him, of Vessels chased and taken by them a few Leagues off,
committing great Cruelties. They were well manned, we understood,
having increased their number greatly by this double Expedition, and
the Reputation of their Success; the Seamen every where entering,
notwithstanding our neighbourhood, and where they refused, by
report, ’twas oftner thro’ Fear, than any detestation of the Practice.
The Conclusion from our Advices, was to follow them to Whydah;
for avoiding this Road, (which it might be imagined they would do, in
respect to our being there) the next and chiefest Place for Booty was
there. We missed them however by 24 hours, but following quickly to
Cape Lopez, luckily fixed the Limits of their Navigation; their
Drunkenness, Inadvertency, and Disorder, making them fall an easy
Prize to us.
Discipline is certainly an excellent Path to Victory; we see it
through all Nations, who in some ages are warlike, in others
effeminate. Courage, locutory or military, like a Trade, is gained by
an Apprenticeship. The Coward to-day, may seven years hence
become a brave Fellow, and metamorphosed again, perhaps by a
bad Wife, or other adverse Fortune. What makes our Militia laughed
at, even by Men draughted from them? only because they want that
constant Discipline, the red Coat and martial Law, that makes the
other terrible: Every Man in standing Troops, is in a School of
Exercise, where, if not dull, he may acquire the Tread, the Talk, and
Courage of a Hero.[37] Subordination is an Essential to it in this very
Discipline; the Gentleman brought up ever so tamely, finding a
Courage with his Commission, and for the most part, increasing as
he becomes a Captain, a Colonel, or a General. The Pyrates, tho’
singly Fellows of Courage, yet wanting such a Tye of Order, some
Director to unite that Force, were a contemptible Enemy, neither
killed nor wounded us a man in taking them, and must ever, in the
same Circumstances, be the Fate of such Rabble.
We found in the three Ships about 200 Englishmen, 60 or 70 stout
Negro Slaves, great plenty of trading Goods, and, what more
attracted the Eye, a large quantity of Gold Dust, by computation, 8 or
10000l. the Searches made, and the Diligence of the Officers in
those Searches, imagining themselves to have some share in the
Heap, makes that Sum very probable; the Pyrates themselves giving
out double: for all which, the Commander at home obtained the
Privy-Seal.
The People, their Wives, and Widows, who thought themselves
injured in this Seclusion, petitioned the Lords-Commissioners of the
Admiralty, the Secretaries, and other Officers of State, for a Recall of
this Grant; sine Auspiciis. The Officers joined also in a Petition for
the E—— of B——y’s Interposition, to obtain for them the Division of
any Sum they might prove, over and above what was suggested in
obtaining the Privy-Seal;—and with the same Success.
To return from this Excursion; the number of our Prisoners gave a
great deal of fatigue and uneasiness, during a six Weeks Passage,
lest the danger of a Halter should prompt them to some desperate
Attempt for their Liberty; but arriving safe at Cape Corso again, they
were there brought to their Tryals, hang’d, or acquitted; the Court
allowing for the Office of Register,
l. s. d.
26 Days Attendance, at 30s. per
Diem, for which at home ⅓ was 26 00 0
deducted
 The Provost, 7s. 6d. per Diem 9 15 0

The General of the Coast gave the Table, which made the whole
Charge rest upon those two Articles, the cheapest since the
Reformation.
 St. George de E L M I N A .
During our Stay in the Road, an Officer or two of us took an Interval
to wait on Mr. Butler, the Director-General for the Dutch at St.
George de Elmina, three Leagues to Windward; he received us so
much the more kindly, that in eighteen years which he had resided
on the Coast, he had seldom been visited by his Countrymen, and of
late, not at all, which he imputed to the Misunderstandings that were
frequently happening between him and his Neighbour, Mr. Phips, on
account of Trade; they could not pay him this Compliment without
offending the other. His Table had ten Dishes of Victuals, an
extraordinary Shew in a part of such Scarcity, with variety of Beer
and Wine, and an attendance of six Negro Servants, each a gold
Chain about his Neck, the largeness distinguishing Grandeur, as fine
Cloth or Lace does a Livery.
After Dinner, Mr. Butler gave us four gold Rings a-piece, (the Make
of the Country) a Trifle, he said, to remember him, and then shewed
us their Apartments and Store-houses, large, and well stocked.
The Castle, taken from the Portuguese in 1638, is a Quadrangle,
like that of Cape Corso, but has a double Ditch round, cut out of a
Rock, which like Basins hold the Rain-water, and give additional
Strength; a populous Negro Town at the foot of it, under their
Protection.
From hence, we retired for the Afternoon to a Summer-house in
his Garden, and in the Evening his Officers attended us to the Boat,
where we were still followed with Marks of undeserved Respect,
three or four Rooves of Brasil Sugar, (then a Commodity) and at
putting off, a Salute of nine Guns. The worst part of our Fare came
afterwards, when we could not commend this Hospitality and
Generosity of Mr. Butler, without indirect Reflections upon our own
Castle.
On the 1st of May 1722, we left Cape Corso, (for my own part, I
hope till Doom’s-Day) and on the third, came down to Whydah. Here
we took a Sailor out of a Portuguese Ship, that had been a
Confederate in seizing Captain Rowry’s Vessel, as mentioned before
at St. Thomas’s; he, on the Reflection of his Crime, and a Fear of
worse Evil, cut his Throat, and died. About this time I was appointed
Purser to the Weymouth, (a Bursier, the Officer in Colleges, that
takes care of their Accounts) every body being dead almost, that
could do it: and with Reluctancy in me, because not skill’d in the
Employ, and neither Cooper, Steward, or Necessaries on board; but
the Indulgence I expected on these accounts from a worthy
Commander, and some little Advantage in quitting the Surgeon’s
Employ, were Persuasives.
From Whydah, both Men-of-War steered away for Cape Lopez, to
wood and water, in order for the West-Indies.
 Cape L O P E Z .
Cape Lopez makes a safe and pleasant Bay, our anchoring in 20
Fathom Water, the Cape N W B N, the Watering-place S B E, each a
mile and half distance.
Coming in, we bring the Cape S. S. W. to avoid what most Charts
lay down, the Shoal called Frenchman’s Bank, about a League and
half N. N. E. from the Cape; and some say there are other Shoals
between that and the Main to the Northward.
The Cape is low and steep, yet looks bluff with Trees, has some
Savannahs behind, the resort of Buffaloes; I have seen a dozen
head at a time here, which, when you are minded to hunt or shoot,
the Negroes are ready to assist. The Bay is well stored with Fish,
and the Country affords Plantains, Goats, Fowls, and particularly
grey Parrots, all cheap; but their principal trading Commodities are
Wax in Cakes, and Honey, exchanged with us on easy terms, for
Linnen, Calicos, Stuffs, Pewter Spoons, Knives, &c. and it is the Seal
of all Bargains, to take hold of one another’s Hands and say,
Palaaver suquebah.
Pou, or Wood, is after the rate of a Fathom, for an old Guinea
Sheet; their Water free, and easy come at, but is a standing Pool,
and not so well-tasted therefore as Springs.
The Natives are harmless and inoffensive, never sell one another.
But when Ships come in, flock towards the Bay with Wax, Honey, a
few Teeth, and little Gold; which last, I rather believe, is brought
thither, because not one of them seemed to know the Value of it.
They are timorous, and therefore have their Habitations at a distance
from the Sea, few of them venturing on board a Ship; feared, I
suppose, by the Tricks have formerly been put upon them by our
Traders: so that we barter altogether on shore, where they attend for
that purpose.
Their familiar Salute at meeting, is by clapping their hands two or
three times, to one another. To a Superior, (the Cabiceer, or the
Aged) they bend the Knee, raising first their Hands to the out-parts of
their Shoulders or Arms, then patting the other’s Hands gently three
times, they cry Chamba at each time, and retreat with three times
clapping their own hands:—to profess an extraordinary Friendship to
you, they raise your Hand as high as they can reach.
Many of them have borrowed Names from the Europeans that put
in here, and are pleased when you will adopt them to wear such a
Cognizance of your Remembrance; they do not sollicit this Favour till
after several views, that they see something to be admired, or that
the Person asked, has a fancied Sympathy of Temper, or likeness
with themselves.
As they come down to trade in Tribes, each has a Captain or
Leader, who always craves or claims some Dashee, before you
strike a Bargain with any of the other Negroes; a Bottle of Brandy, a
Sabre, Knife, or any ordinary Apparel is acceptable; the Chief loves
to distinguish himself by an Imitation of our Dress, and is often so
preposterously set out with Hat, Wig, and Breeches, that he makes a
fifty times more ridiculous, and scaramouch Figure, than any of his
naked Dependants.
Jacobus was one of these; he takes on him the Title of King,
without knowing the meaning, and came on board to visit us in a
very antick Figure; an old Sailor’s Wig turned upside down, half a
pair of Breeches, Jacket, Hat, &c. yet this Man seemed to be
reverenced much by the others, and in drinking, two of them always
held up a Cloth before his Face, that he might not be seen; the
Custom seems to have a State in it, and borrowed perhaps from
some neighbouring Monarch: He of Monomotapa, it is said, never
drinks, but the Court put up their Prayers with a loud Voice, which
being heard by others, is transmitted over the whole Town.
As Jacobus and his Company grew drunk, (for they swallowed
nothing but Bumpers of Brandy) I observed this Respect was laid