Entrepreneurship and Innovation

Homework: Why startup fails?

20 reasons

https://www.cbinsights.com/research-reports/The-20-Reasons-Startups-Fail.pdf
http://www.forentrepreneurs.com/why-startups-fail/

Exercise: How to setup an Airline?

Reality check

1. PEST

   • Political
   • Economic
   • Social
   • Technological
   • e.g. PMI, BDI(Baltic Dry Index)

2. Michael Porter - 5 forces

   • Competitive Rivalry within an Industry
   • Bargaining Power of Customers
   • Bargaining Power of Supplier
   • Threat of New Entrants
   • Threat of Substitute Products

3. Industry Outlook

4. Business Valuation

5. SWOT

   • Strength
   • Weakness
   • Opportunity
   • Threats

6. Drivers and Scalability

7. Competitors

8. Customers

Business Plan

• Mission Statement
• Company background
• Product Description
• Marketing Plan(Price Place Promotion...)
• Competitor Analysis
• SWOT Analysis
• Operations
• Financial Planing
• Timeline
• Executive Summary

Exit Strategy

1. M&A - mergers and acquisitions
2. IPO - get listed on a stock exchange
3. BAU - Behave as usual

Valuation

All valuation is based on forecast/cashflow based/risk-adjusted

CAPM(Capital Asset Pricing Model)
Ke = Rf + (Rm - Rf) * beta
WACC = Cost of equity (+) Cost of debt

Industry standard discount rates

• Seed: 80%+
• Angel: 50%-70%
• Serial A: 40%-60%
• Serial B: 30%-50%
• Bridge: 25%-35%

Next guest speaker: ONG&ONG Corporate