Venture Capitals & Entrepreneurship

Venture Capitals:

Every business needs some cash to run itself. There are some ways through which you can fund your business including:

a) Personal savings

b) Bank Loans

c) Venture Capital

The VC model is a great way to get your business running by acquiring a large amount of money from a Venture Capital firm. This is good for companies who want to grow dramatically very quickly or those companies whose nature of business demands heavy cash investment.

A VC is typically a firm that collects funds from wealthy individuals who wish to invest money in businesses for profit. This collected fund is then used to run the business for which it was collected. The idea is that when this company/business goes public or is acquired by someone else, it will be worth hundreds and millions of more money than what was invested. This profit is then distributed among the initial investors of the business.

A VC firm not only offers money but also vital advice on how to run the business from a financial perspective. The people in the VC might have more experience and exposure to markets than the new businessmen themselves. So that’s basically how it is a very good funding idea for startups.

The downside of such a model would be that the VC is depending a lot on the business for profit. One cannot guarantee if the business would show any return on investments or not. Secondly, what if the business does not want to liquidate its assets?

Entrepreneurship

Entrepreneurship is the act of being an Entrepreneur who is defined as:

“One who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods” – Wikipedia

So technically, entrepreneurs are people who come up with a unique idea/business, take initiative to bring it forward, formulate strategies as to what resources would be required to implement that idea, and then put that idea into working.

In today’s world, entrepreneurship has become a very popular model. With so many students graduating all over the world each year there is no guarantee that all of them would have jobs waiting for them on a golden plate. The industries are moving at such fast pace that we need more unique ideas to come forward, more young people with bright minds to take initiative and come up with innovative ideas and contribute to the global economy that can solve many problems of our world!

Entrepreneurs have leadership characteristics. They envision a certain idea perceived from opportunities arising around them and take advantage of that fact to implement their idea. They are risk takers and decision makers. They speculate their opportunities and risks and form a strategy accordingly.

Entrepreneurship Success Story:  Instagram – photo sharing platform

Instagram is a free photo sharing application that allows its users to take photos and add customized filters to their pictures in order to enhance its colors and beauty and share it on different social networking platforms including instagram’s own social network. Launched in October 2010 by Kevin Systrom and Mike Krieger, this application has gained much popularity among its users.

Initially Instagram started as a mobile application for Apple devices only, but later due to its rapidly growing popularity they expanded towards Androids as well.

Instagram was formed by its entrepreneurs based on the Venture Capital Model. The company had only 13 employees. It was recently acquired by Facebook along with its 13 employees for approximately $1 Billion. This acquisition by Facebook, which is an entrepreneurship success story in itself, could do a lot good to instagram’s unique technology.

Instagram’s popularity can be measured by the number of awards it has received:

• In January 2011, Instagram was the runner-up for "Best Mobile App" at the 2010 TechCrunch Crunchies.
• In May 2011, Fast Company listed CEO Kevin Systrom at number 66 in the "The 100 Most Creative People in Business in 2011".
• In June 2011, Inc. included co-founders Systrom and Krieger in its 2011 "30 Under 30" list.
•  In September 2011, Instagram won "Best Locally Made App" in the SF Weekly Web Awards.
• 7x7 Magazine's September 2011 issue featured Systrom and Krieger on the cover of their “The Hot 20 2011” issue.
• In December 2011, Apple Inc. named Instagram "App of the Year" for 2011.

Entrepreneurship

Entrepreneurship is the process of,

Implementing innovative ideas

 Or

 Building something by taking risk in order to improve economic conditions

Or

By using certain amount of resources with smartness and talent to generate big profit

 Or

 By analyzing the environment and its problems to produce solution.

Number of definitions are purposed by the people like joseph Schumpeter , peter Drucker, Frank Knight and so on. All of them defined this process in different ways but eventually numbers of characteristics are target; Decision making, Risk taking, Accepting challenges, Building organization, Skillful Management, Innovation, and Mobilization of resources.

                        Entrepreneurship process is carried out by key people who give the innovative ideas and take risk is the Entrepreneur. Entrepreneur see “problems” as “opportunities,” then take action to identify the solutions to those problems and the customers who will pay to have those problems solved. One of the example entrepreneurship is this in old time period combination of a steam engine and then current wagon making technologies to produce the horseless carriage. In this case the innovation, the car, was transformable but did not require the development of a new technology, merely the application of existing technologies in a novel manner. It did not immediately replace the horse drawn carriage, but in time, incremental improvements which reduced the cost and improved the technology led to the complete practical replacement of beast drawn vehicles in modern transportation.

Successful story of Entrepreneurship:

A.J. Scribante started off selling bleach to supermarkets and other stores around the Midwest. But Scribante had bigger things in mind. He wanted to find a better way to compare regional differences in retail prices, so that he could make more sales.

He started collecting newspaper grocery store ads from various cities to show to grocery stores in different markets. He put all those ads into a single booklet. He realized how valuable the information was when companies started requesting price data for competitors. Thus, the idea for MAJERS, what would become a multi-million dollar marketing Information Company, was born.

W Hewlett and D Packard to Hewlett-Packard (HP) Company

William Hewlett and David Packard were the student of Stanford University. Professor Frederick Terman encourage them to start their own business. started with a capital investment of $538 on William Hewlett's garage in Palo Alto. The company name is to be decided now, they flipped the coin for this and Hewlett won the toss then Hewlett-Packard is there in 1939.

They began with the Hewlett master's thesis they created an audio oscillator. There forst product was HP200A sound equipment.they weren't getting dealing company offering its first product didn't do much for sales .In 1940, the Walt Disney Company ordered eight oscillators fro the Disney film Fantasia.

Inspired by the sale to Disney, Hewlett and Packard decided to try selling their new products.After developing a range of electronic products, the company entered the computer market in 1966 and is now one of the world’s largest technology corporations. HP is a leading technology solutions provider for consumers and businesses with market leadership in fault-tolerant servers, UNIX servers, Linux servers, Windows servers, storage solutions, management software, imaging and printing and PCs.

SUCCESS STORY OF WOMEN ENTREPRENEURSHIP

SUCCESS STORY OF WOMEN ENTREPRENEURSHIP

Starting a business is full of ups and downs, where you meet challenges every step of the way. To succeed, you need to have passion, skills, knowledge, chutzpah, and lots and lots of luck. But it all starts with you. Sometimes it is more than ruling your home and for security for your family, you also need to be on the business side and make everything PERFECT IN YOUR WORLD!!

Although Depilex prides itself in being the salon for the average woman, there was nothing average about the women that showed up to pay their respect on Depilex’s 30-year celebration soiree at the brand’s largest salon.  Stylist Musarrat Misbah is a soft & kind hearted lady with many God gifted talents. She is Pakistan's first beauty expert, who initiated the trend of professional beauty salons in the country. Before Depilex, the concept of a professional salon was not present in Pakistan.

Due to the consistency and hard work, Stylist Musarrat Misbah has launched various branches of Depilex in different cities of Pakistan. Besides, Depilex is gaining international popularity with the launch of another branch in foreign country. Depilex now has 23 branches in Pakistan and one in Dubai, UAE. In Pakistan there are three branches located in Karachi, six in Lahore and three in Islamabad, three in Peshawar, two in Rawalpindi, and each one in Sialkot, Gujranwala, Mardan, Abbottabad and Faisalabad. Besides them, now Depilex is planning to open new branches in England and the US.

The idea behind the event was brilliant because salons have always been women’s safe haven in a society as male-dominated as ours where every public space is graffitied with a strong spray of male. In the closely guarded confines of a salon, many a woman have gossiped, bitched, cried and unburdened themselves onto their trusted hair-dresser, their psychologists and confidantes. And for the way these women would take Misbah to a side as they privately shared a joke or revealed a secret, Misbah said, “What I have built in the last 30 years are not just 30 salons, but trust from my clients and that is a valuable keep sake.”

Misbah is one of the successful names in women entrepreneurship. So she is not the man. She is truly the Woman as I believe!

Venture Capital/Entrepreneurship (Muhammad Ali Siddiqui)

VENTURE CAPITALISM/ENTREPRENEURSHIP.

Entrepreneurship is a dynamic process created and managed by an individual (the entrepreneur), which strives to exploit economic innovation to create new value in the market. An entrepreneur is a person, who has entrepreneurial mind with a strong need for achievement.

And, Venture capital (VC) is funding invested, or available for investment, in an enterprise that offers the probability of profit along with the possibility of loss. Indeed, venture capital was once known also as risk capital, but that term has fallen out of usage, probably because investors don't like to see the words "risk" and "capital" in close conjunction. Venture capitalists often don't tend to think that their investments involve an element of risk, but are assured a successful return by virtue of the investor's knowledge and business sense.

SUCCESS STORY:
Mark Bao, 17
11 Companies, 3 Foundations

Mark is a 17-year-old high school senior and he has already launched 11 web-based companies (and sold three of them) along with three non-profit foundations. Some of his projects include TickrTalk, the Ramamia Foundation, Classleaf, and Avecora – a technology network launching sometime in 2013.

Mark Bao had his first encounter with entrepreneurship in the fifth grade. He used Visual Basic 6.0 to write a simple computer application that managed his homework assignments and helped him write school papers. Then he copied the program onto floppy discs and sold them to his friends.

His first start-up came in his first year of high school. Debateware.com was an event management system for debate organizations. Eventually, Mark and his business partner sold it to the largest debate organization in the United States.

Today Mark is a 17-year-old high school senior and he has already launched 11 web-based companies (and sold three of them) along with three non-profit foundations. Some of his projects include TickrTalk, the Ramamia Foundation, Classleaf, and Avecora – a technology network launching sometime in 2013.

SUBMITTED BY: MUHAMMAD ALI SIDDIQUI
STUDENT ROLL: 11K-3013
FAST MS(SPM)

Venture Capital and Entrepreneurship by Majid Hussain

Venture Capital:

What I understood from my recent studies about venture capital that the companies provide capital for startup businesses and to new entrepreneurs are known as “Venture Capital”. They own equity or share in that business in which they invest and then from profit of business they pay back that invested amount to the investors and they earn by charging management fee of about 1.5 to 2.5 percent or higher of the total capital invested. They get investors and show them potential areas to invest in and get entrepreneurs, new companies and startup businesses on the other side to get good source of investment. They could have single venture partner or also get a group of investors and on the other side they also look for persons, companies with new ideas to invest in but these have some high risks but have the potential for above-average returns. So we can say that they are the risk takers and assessing risk very early in the start or before investment so that capital can be saved as earlier as possible and they mostly succeed in doing that, research proved that IT startups are the area to invest in because of its minimum or zero failure rate in IT businesses.

Venture Capital Company identifies attractive areas of businesses to invest, let say we can have health care, IT industry, power sector or telecom in Pakistan and then communicate the advantages of investment in these attractive sectors and help investors in understanding business strategy. They have a very close eye on the risk assessment and future of the business areas in which they use to invest so that they could make sure that investor’s money is to grow and there is no insecurity in investment. There is a lot of potential in venture capital industry. It is emerging as a very huge industry for investors from around the world. Why..? Because as we know there are always challenges in knowing about the emerging businesses and where to invest at what time, so venture capital firms solved this problem of investors by informing about the potential markets. Venture capital firms are expanding their areas as they are getting investors from around the world and putting large investments in startups and high potential businesses and help them grow.

Entrepreneurship:

                Entrepreneurship is what entrepreneurs do and starting a new business makes you an entrepreneur. Its sounds very simple so we will be interested in knowing what entrepreneurs do. Entrepreneur are the people who took initiative, do some innovation or got some idea and then transform that innovation or idea  to economic goods in simple words generate income so that results in creating new organization. According to the business dictionary entrepreneurship is “The capacity and willingness to undertake conception, organization, and management of a productive venture with all attendant risks, while seeking profit as a reward”.

From what I read about this interesting topic I can say that our earlier generation in their last years of employment or after their retirement they use to do some self-employment activities i.e put there earned amount to start any new business and that’s how they become entrepreneur but in today’s age what we see is that we have very successful young entrepreneurs. It’s because of the IT business where young people have enough knowledge of the field so that they can start doing some smart and interesting idea and get there business setup in no time and make giants out of their startup. We have a lot of examples from recent years where we see many young entrepreneurs like Google or Facebook.

References:

http://en.wikipedia.org/wiki/Entrepreneurship

http://www.sbs.ox.ac.uk/centres/skoll/about/Pages/whatisse.aspx

http://www.businessdictionary.com/definition/entrepreneurship.html

http://stvp.stanford.edu/blog/?p=4169

http://www.nsansa.org/2012/what-is-missing-from-entrepreneurship-education/

http://www.mit.edu/people/jpbonsen/ecenter.html

http://ecorner.stanford.edu/teachingGuide/venture_capital/1/

http://en.wikipedia.org/wiki/Venture_capital

http://www.investopedia.com/terms/v/venturecapital.asp#axzz1pCvd7OqX

http://www.entrepreneur.com/vc100

Success Story:

                While going through some success stories I got to know about a local Afgani guy who becomes a very successful entrepreneur, so I would like to share his story with you. Liwal was a Afghani refugee living in Peshawar refugee camp. Got out of schooling a bit early, might be in 7^th class he left school and then not got any chance to join any school. Got interaction with computers in early nineties. Asked some of his teachers that computer is in English why we don’t have it in pushto, Persian or urdu.? What they reply you know.. they said its not the work of one or two persons there are thousands of people working to build these large systems so we can’t do this. So he took this as a challenge and started self-learning all the computer related stuff and programming languages. With that effort he came up with a pushto version of DOS..amazing… Then he produced the pushto, Persian and dari version of word perfect (an earlier software for word processing). And according to him people without any processing software only publishing about a 100 books a year but after his work they used to published more then thousand books in dari and Persian languages.

                From there his aim was clear that he has to do a lot for his community to make their life easier in using computer. So he goes on with producing windows in local language and then he put his efforts to education sector in Afghanistan where he came up with a very low cost learning solution for student of any area or any age at their door step. He done this by opening a TV channel and providing them education from TV and combined it with IT. He also started another company producing computer systems with his brand “Liwal Computers”. His company combine all parts to produce branded computers. So this was a brief story or Liwal a very successful entrepreneur that I shared with you…you can have more details about Liwal at Liwal.com and for his introduction can also look his interview.

So dear fellows this was my writing about Venture capital and entrepreneurship.. hope it was interesting reading for you.. will be waiting for your comments...!