New & Small Business Ventures
MGT 244 Spring Qt. 2003
Instructor: Fernando Garcia, M.B.A., J.D.
Office Hrs.: 257 AOB IV, Wednesdays, 1:30 –2:45 PM, or by appt.
In the post “dot.com bust” environment, entrepreneurs face new obstacles to new business venture formation. What lessons
can entrepreneurs learn from the dot.com implosion? And, equally importantly, what must entrepreneurs do in order to
succeed in this new environment? One major new obstacle facing entrepreneurs is the almost disappearance of funding
available for early stage ventures. Accordingly, a central theme in the course will focus on traditional and non-traditional
options available to entrepreneurs to secure financial, human capital and other resources in the current funding environment.
The course’s main objective is to provide students the opportunity to “sit” in the entrepreneur’s chair in order to understand
the dynamic atmosphere of a start-up, and expose them to the strategic and financial issues facing most high growth start-ups.
The course pedagogue relies heavily on the case method, supplemented by other readings, lectures, and outside speakers,
including previously successful entrepreneurs and new start-up entrepreneurs seeking to build their legacy in the new
The learning objective is to give each student a sophisticated level of understanding for the strategies and techniques
employed by successful entrepreneurs in building and developing high growth ventures. In the course, we will examine new
business ventures at different stages of development, from conceptualizing the business idea to harvesting or exiting the
venture. In addition, we will examine the reasons, and strategies for acquiring companies as opposed to starting one.
The structure of the course is broken down into the following general areas:
• Entrepreneurship & Start-Up Strategies
• Use & purpose of Business Plan;
• Deal Structuring, Negotiating Deal Terms, & Valuation Techniques for New Ventures
• The Tools and Strategies for Raising Venture Capital & Alternative Financing for New Ventures
• Acquisition of Private Companies
• Entrepreneurial Management Issues: Maintaining Control & Direction
• Harvesting the Venture Via IPO, Sale of the Business, or Merger
Text: New Business Ventures and the Entrepreneur, 5th Ed. Stevenson, Howard H., Roberts, Michael, and Grousbeck,
Harold Irving, New York, N.Y. McGraw Hill/Irwin, 1999.
Supplemental Course Reader: Harvard and Stanford Business Schools cases, and technical notes.
A. Read All Assigned Cases/Notes/Articles.
Students are required to read all reading assignments, and be prepared to discuss in class.
B. Two Options for Meeting Course Written Assignment Requirement:
Students will have two options for meeting the MGT 244’s writing requirement.
a. Option 1: Submit THREE Case Analyses
During the course a total of SIX entrepreneurship case studies will be examined and discussed. One way for a student to
meet the writing requirement is by submitting 3 case write-ups during the term. A student may chose any 3 cases out of
the six presented. In addition to the six published cases, we will also have the opportunity to look at the live case study of
SeaBridge Software, which may be included among the three case write-ups. These write-ups, at a minimum, must define
the problem, present a brief factual background, present restated financial data or otherwise critically assess the financial
data presented in the case, preferably in the form of an Excel spreadsheet or similar presentation structure, and present a
recommended plan of action. These case studies should run in length a minimum of five pages, excluding exhibits.
Students will be graded on organization, financial analysis and presentation, detail of action plan, and creativeness. The
case write-ups are due at the end of the class discussion pertaining to the case write-up; late submissions will be
penalized. Students may select any three cases from the SIX assigned cases. Students are encouraged to pace
themselves in completing this assignment, and should avoid deferring this requirement to the later half of the
b. Option 2: Participate in the Business Plan Team Project
Students will self select and form a business plan team (BP Team), consisting of 3 to 5 student members. Each BP Team
will develop a new business concept, and take that concept to a fully developed business plan that will be discussed on
the last day of class. BP Teams must also prepare a 2 page executive summary of their business plans as well as prepare a
short (15 to 20 minute) oral presentation using PowerPoint or overhead slides for their presentations. A typical business
plan for this exercise should run in length about 10 to 20 pages, excluding financial projections and other pertinent
exhibits. Students may develop their own new business venture concept, or obtain the assistance of the instructor to
identify potential opportunities.
BP Teams Timeline: 3rd Class meeting: Team Members; Business Concept
7th Class meeting: Rough Draft of Business Plan
9th Class meeting: Executive Summary- Final Draft
10th Class meeting: Business Plan Final & Presentation
Each student’s final course grade will be calculated on the cumulative points earned on all assignments, according to the
following assignment-weighted formula:
Class Participation: 25%
Case Write-Ups OR Business Plan: 75%
Instructor’s Brief Bio:
Fernando Garcia brings a rich background combining academic, professional, and entrepreneurial experience. Mr. Garcia is a
former investment banker at Kidder Peabody & Company and Bear Stearns & Company. He has been an entrepreneur,
corporate board member, advisor to founders and managements of high technology companies, and is currently raising funds
for a new real estate venture fund entity. Mr. Garcia has previously taught MBA-level corporate finance, international finance
& economics, and entrepreneurship courses at Haas School of Business, U.C. Berkeley, and McLaren School of Business,
University of San Francisco. Mr. Garcia received B.A. and J.D. degrees from UC Berkeley, and MBA degree from Harvard.
Course Topics Outline and Reading Assignments:
MGT 244 Course Schedule
WEEK Date Topics Readings Guest
1 April 2 Introduction to Course; The Entrepreneurial Stevenson, Ch. 1
Process; Start-up Strategies Case: DAG
2 April 9 Developing Startup Strategies; The Business Stevenson, Chs. 2, 4 & 6 Heather Evans
Plan Case: Heather Evans Video
Supplement: “How to Write a
Great Business Plan” by William
3 April 16 The Business Plan (continue); Legal Forms of Stevenson, Ch. 5
Organization; Legal Issues Primer for Supplement:
Entrepreneurs “Legal Aspects of
Framework” by Constance
4 April 23 Search for Capital I: Dealing with VCs; An Stevenson, Ch. 3 David Brogan,
introduction to venture capital; The state of Supplement: “Note on Pre-Money Co-Founder,
venture capital funding; Valuation Techniques & Post-Money Valuations (A) Market Tools
and (B)” by Linda Cyr
5 April 30 Search for Capital II: Terms Sheets & Deal Stevenson, Chs. 10 & 11 Don Reinke,
Structure; Private Placements; Angel Investors “Establishing The Venture Partner, Reed
Capital Investment Terms” by Smith, LLC
Bay Venture Counsel, LLP
Cases: Walnut Venture
Associates (A), (B), (C), and (D);
Read case (A) for background,
and focus on cases (B), (C) & (D)
for class discussion w/ Guest Sp.
6 May 7 Attracting Stakeholders in the New Venture; Stevenson, Chs. 7, 8 & 9 Jamie Pardi,
Bootstrap Financing; Alternative Sources of Live Case: Founder,
Financing SeaBridge Software SeaBridge
7 May 14 Managing the Growing Venture Stevenson, Chs. 16 & 17
Case: Gordon Biersch (in
Case: Gordon Biersch: New
Challenges & Opportunities
8 May 21 Acquiring a Private Company Stevenson, Chs. 14 & 15 Edward
Case: Allen Lane Mooney, Pres.,
9 May 28 Harvesting the Venture; The IPO Option & Stevenson, Ch. 18
Issues; Merger and Consolidation Strategies Case: Teleswitch (A)
10 June 4 Business Plans Presentations None BP Teams