Lecture 13 Lecture 13 Everything you wanted to knowEverything you wanted to know

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HousekeepingCourse Evaluation QuestionnaireDiscussion of Course

What worked and what needs improvement

Giving a Good TalkTypes of CorporationsAccounting 101Thoughts on Entrepreneurship at CaltechMidnight thoughts

HousekeepingHousekeeping On Thursday, we will have a rehearsal. On Thursday, we will have a rehearsal.

Tell me what you are going to tell meTell me what you are going to tell me Ask questions on approachAsk questions on approach

On Friday we will have the Final On Friday we will have the Final PresentationsPresentations Get everyone involvedGet everyone involved Enthusiasm, confidenceEnthusiasm, confidence Fact-basedFact-based Avoid hyperbolaAvoid hyperbola

Final paper is due at midnight on SundayFinal paper is due at midnight on Sunday

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A Great Talk – thanks A Great Talk – thanks Tony LunaTony Luna1.1. Point of ViewPoint of View

1.1. Experiences, influences, human conditionExperiences, influences, human condition2.2. ContinuityContinuity

1.1. Consistant thread carried throughoutConsistant thread carried throughout3.3. ProfessionalismProfessionalism

1.1. Vocab, eye contact, gestures, voice projectionVocab, eye contact, gestures, voice projection4.4. Simple MessageSimple Message

1.1. Clear takeawayClear takeaway5.5. UniquenessUniqueness

1.1. Original voiceOriginal voice6.6. Relevance to audienceRelevance to audience

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The concept of “Lessons The concept of “Lessons Learned”Learned”

Performed usually after a project is Performed usually after a project is completecomplete

Object Object to benefit from an analysis of history to benefit from an analysis of history to avoid repeating errorto avoid repeating errorto learn what worksto learn what works

Cycles of LearningCycles of Learning Forgetting curveForgetting curveSupplements “benchmarking” Supplements “benchmarking”

Learning from the bestLearning from the bestApplying lessons to next iterationApplying lessons to next iteration

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Apply to new companyApply to new company Don’t make dumb mistakes you could have avoided Don’t make dumb mistakes you could have avoided

- make your own dumb mistakes!- make your own dumb mistakes! Examine case histories (retrospective analysis- Examine case histories (retrospective analysis-

especially in analogous space)especially in analogous space) Interview participantsInterview participants Examine clichésExamine clichés

Huge marketsHuge markets Hockey stickHockey stick First mover advantageFirst mover advantage

Put people on advisory Board with multiple and Put people on advisory Board with multiple and diverse experiencesdiverse experiences

Smart money InvestorsSmart money Investors Appropriate modesty about predictive ability of Appropriate modesty about predictive ability of

Business Plans- Think risk, Think Contingency Business Plans- Think risk, Think Contingency PlanningPlanning

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On the back of the paper On the back of the paper writewrite

1. What did I like best about 1. What did I like best about this course?this course?

2. What could be improved?2. What could be improved?3. Did it meet my 3. Did it meet my

expectations?expectations?4. Any other comments?4. Any other comments?04/22/23 6

E 102 What worked/didn’t work E 102 What worked/didn’t work for you Score 1-10 (10 high)for you Score 1-10 (10 high)

GuestsGuests Bill CollinsBill Collins

SalesSales Chris HalliwellChris Halliwell

MarketingMarketing Gil ElbazGil Elbaz

Met ExpectationsMet Expectations Team formationTeam formation Problem selectedProblem selected Team activitiesTeam activities Lecture/HW Lecture/HW

presentation presentation formatformat

KenKen VedranVedran

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What worked/Didn’t WorkWhat worked/Didn’t Work Tech Coast Angel meetingTech Coast Angel meeting Pasadena Angel MeetingPasadena Angel Meeting MentorsMentors Making contactsMaking contacts Making presentationsMaking presentations

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Team Experience in E102Has it worked?

What went right?

What went wrong?

How could the process be improved?

Please go online and fill Please go online and fill out TQFR Survey out TQFR Survey

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EntrepreneurshipEntrepreneurship Creation of a nation’s wealthCreation of a nation’s wealth Creation of jobsCreation of jobs Creation of great productsCreation of great products Creation of leadersCreation of leaders Complements and funds great scienceComplements and funds great science

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Company TypesCompany TypesFinancial Statements Financial Statements Income StatementIncome Statement Balance SheetBalance Sheet Cash Flow StatementCash Flow Statement

Gross Margin of ProductGross Margin of Product

Important Negotiation ToolsImportant Negotiation Tools Term SheetTerm Sheet

Subjects for TodaySubjects for Today

ChoicesChoices Sole ProprietorshipSole Proprietorship PartnershipPartnership ““S” CorporationS” Corporation ““C” CorporationC” Corporation Limited Liability CorporationLimited Liability Corporation

““C” CorporationC” Corporation Company continues regardless of incapacity or death of Company continues regardless of incapacity or death of

one or more stockholders. one or more stockholders.

Can have ownership changes without disturbing ability to Can have ownership changes without disturbing ability to conduct business. conduct business.

pays taxes and dividends are also taxable to stockholders. pays taxes and dividends are also taxable to stockholders.

Corporate shield protects other investments and savings Corporate shield protects other investments and savings of the stockholdersof the stockholders

The annual meetings of stockholders can provide more The annual meetings of stockholders can provide more comprehensive guidance for management. comprehensive guidance for management.

Depending on the corporation's business record and the Depending on the corporation's business record and the policies and practices of prospective lenders, access to policies and practices of prospective lenders, access to credit and the ability to secure needed resources may be credit and the ability to secure needed resources may be improved. improved.

““S” CorporationS” Corporation““C” Corporation vs. “S” Corporation - What's the C” Corporation vs. “S” Corporation - What's the

difference?difference?

““S”=“C” with one exceptionS”=“C” with one exception

“ “S” corporation has a single tax imposed at the S” corporation has a single tax imposed at the shareholder level shareholder level

"C" corporation has a tax imposed both at the "C" corporation has a tax imposed both at the corporate level and then again when the corporate level and then again when the corporation makes a distribution to the corporation makes a distribution to the shareholders.shareholders.To be eligible for “STo be eligible for “S Less than have more than seventy-five shareholders, all Less than have more than seventy-five shareholders, all

of whom must be individuals or certain trusts in estates, of whom must be individuals or certain trusts in estates, one class of stock outstanding.one class of stock outstanding.

““C” Corporation C” Corporation DisadvantagesDisadvantages

Lenders may require personal guarantees from corporate officers as a Lenders may require personal guarantees from corporate officers as a condition of supplying credit, thus negating the limitation of liability. condition of supplying credit, thus negating the limitation of liability.

Conflicts or disagreements among the stockholders (usually a small group Conflicts or disagreements among the stockholders (usually a small group of persons) may immobilize decision making. of persons) may immobilize decision making.

Restrictions on the sale of stock and/or buy-back agreements included in Restrictions on the sale of stock and/or buy-back agreements included in the bylaws may prevent minority stockholders from being able to recover the bylaws may prevent minority stockholders from being able to recover the value of their investment in the corporation. the value of their investment in the corporation.

If appreciated assets are owned by the corporation and the corporation is If appreciated assets are owned by the corporation and the corporation is dissolved, significant income taxes on the appreciation amount will be dissolved, significant income taxes on the appreciation amount will be generated. generated.

The corporate shield of limited liability may be lost: The corporate shield of limited liability may be lost: When corporate formalities are not followed — that is, when director When corporate formalities are not followed — that is, when director

and shareholder meetings are not held and minutes of such meetings and shareholder meetings are not held and minutes of such meetings are not kept. are not kept.

When corporate assets are treated as personal assets — for example, When corporate assets are treated as personal assets — for example, when a corporate vehicle is used for family vacation and the when a corporate vehicle is used for family vacation and the corporation is not reimbursed for the nonbusiness use. corporation is not reimbursed for the nonbusiness use.

When limited liability is lost, shareholders become personally liable for When limited liability is lost, shareholders become personally liable for any corporate legal or financial obligations. In addition, if corporate any corporate legal or financial obligations. In addition, if corporate income tax returns are audited, failure to observe corporate formalities or income tax returns are audited, failure to observe corporate formalities or treating corporate assets as personal assets can cause penalties and treating corporate assets as personal assets can cause penalties and interest years. interest years.

Sole ProprietorshipSole Proprietorship Business entity and your other affairs Business entity and your other affairs

(personal and business) are merged. As the (personal and business) are merged. As the proprietor, you own and control the business.proprietor, you own and control the business.

All proprietorship debt is payable by the All proprietorship debt is payable by the proprietor (proprietor's family unit) proprietor (proprietor's family unit)

lenders customarily require signatures on debt lenders customarily require signatures on debt agreements by both the proprietor and spouse agreements by both the proprietor and spouse

All profits accrue to, and all losses are borne All profits accrue to, and all losses are borne by, the proprietor (the family). by, the proprietor (the family).

Must separate finances and records for your Must separate finances and records for your business unit and your household. business unit and your household.

Sole ProprietorshipSole ProprietorshipAdvantagesAdvantages Simplicity and flexibility. Simplicity and flexibility.

established, modified, bought, sold, or terminated very established, modified, bought, sold, or terminated very quickly. quickly.

No organizational arrangements (bylaws, organizational No organizational arrangements (bylaws, organizational charter, etc.) required charter, etc.) required

Only routine permits and licenses requiredOnly routine permits and licenses required legal assistance not required to start, terminate, redirect, or legal assistance not required to start, terminate, redirect, or

modify the business. modify the business. The proprietor can decide to start a business and almost The proprietor can decide to start a business and almost

immediately can say, "I'm open for business and I'm my own immediately can say, "I'm open for business and I'm my own boss.“boss.“

Limitations Limitations

mingling of business and household finances often occursmingling of business and household finances often occurs everything the proprietor and family own can be at risk in everything the proprietor and family own can be at risk in

both personal and business activities both personal and business activities the resource base limited including credit availability and the resource base limited including credit availability and

capacity to respond to business opportunitiescapacity to respond to business opportunities

PartnershipPartnershipAn association of two or more persons formed to carry An association of two or more persons formed to carry

on a business each of whom has a specified on a business each of whom has a specified ownership interest ownership interest

General Partnership or Limited Partnership General Partnership or Limited Partnership

Most business partnerships are organized as Most business partnerships are organized as general partnerships. In many, the partners are general partnerships. In many, the partners are related by blood or by marriage related by blood or by marriage

(Should be) based on a written agreement(Should be) based on a written agreement Typically not an income tax paying entityTypically not an income tax paying entity Profits and losses pass through to the partners' Profits and losses pass through to the partners'

individual tax returns in proportion to their individual tax returns in proportion to their respective ownership interests. respective ownership interests.

Unless specified otherwise, partnership is Unless specified otherwise, partnership is dissolved upon the death or withdrawal of one of dissolved upon the death or withdrawal of one of the partners. the partners.

PartnershipPartnershipAdvantages Advantages easyeasy In a general partnership partners can In a general partnership partners can

specializespecialize In a limited partnership only the general In a limited partnership only the general

partner can be manager partner can be manager Limited partners enjoy a limited liabilityLimited partners enjoy a limited liability Borrowing capacity of a partnership may be Borrowing capacity of a partnership may be

greater than the total borrowing capacity greater than the total borrowing capacity of the partners as individuals. of the partners as individuals.

Cost of establishing a partnership is Cost of establishing a partnership is relatively low , record keeping and tax relatively low , record keeping and tax filing relatively easyfiling relatively easy

PartnershipPartnershipLimitations Limitations General partnership- all assets of each partner are General partnership- all assets of each partner are

at risk at risk Limited partnership- all assets of the general Limited partnership- all assets of the general

partner are at risk and capital invested by the partner are at risk and capital invested by the limited partners is at risk. limited partners is at risk.

Any partner in general partnership and the general Any partner in general partnership and the general partner of a limited partnership can enter into partner of a limited partnership can enter into contracts binding on allcontracts binding on all

General partnership can end upon the death or General partnership can end upon the death or divorce of any partner divorce of any partner

Any general partner can require dissolution of the Any general partner can require dissolution of the partnership at any time. partnership at any time.

It may be very difficult to get out of a partnership It may be very difficult to get out of a partnership without undue financial loss Conflicts can without undue financial loss Conflicts can immobilize business decision makingimmobilize business decision making

Income StatementsIncome StatementsA record of a companies earnings A record of a companies earnings

or losses for a given period. or losses for a given period. Shows all of the money a company Shows all of the money a company

earned (revenues) and all of the earned (revenues) and all of the money a company spent money a company spent (expenses) during this period. (expenses) during this period.

The basic measure of profitability. The basic measure of profitability.

Sample Income Sample Income StatementStatement

Wilma's Widgets Income Statements for the Years Ending 1998 Wilma's Widgets Income Statements for the Years Ending 1998 and1999and1999

19981998 19991999

Net SalesNet Sales $900,000$900,000 $990,000$990,000Less Cost of SalesLess Cost of Sales (250,000)(250,000) (262,500)(262,500)Gross Profit on SalesGross Profit on Sales 650,000650,000 727,500727,500

Less General Operating ExpensesLess General Operating Expenses (120,000)(120,000) (127,500)(127,500)Less Depreciation ExpenseLess Depreciation Expense (30,000)(30,000) (30,000)(30,000)Operating IncomeOperating Income 500,000500,000 570,000570,000

Other IncomeOther Income 50,00050,000 30,00030,000Earnings Before Interest and TaxEarnings Before Interest and Tax 550,000550,000

600,000600,000Less Interest ExpenseLess Interest Expense (30,000)(30,000) (30,000)(30,000)Less TaxesLess Taxes (50,000)(50,000) (54,500)(54,500)Net EarningsNet Earnings 470,000470,000 515,500515,500

Income StatementIncome StatementNet Sales = Gross sales - ReturnsNet Sales = Gross sales - Returns Company’s “top line” revenue from its main Company’s “top line” revenue from its main

or core business. (or core business. (Issue how do you define Issue how do you define revenue?)revenue?)

Cost of SalesCost of Sales What did it cost the company to directly What did it cost the company to directly

produce or generate the goods or services produce or generate the goods or services represented in the net sales figure. represented in the net sales figure.

Includes direct costs such as raw materials or Includes direct costs such as raw materials or acquisition cost of the goods acquisition cost of the goods

Does not include indirect spending Does not include indirect spending MarketingMarketing Sales, or Administrative expensesSales, or Administrative expenses

Gross ProfitGross Profit = Net Sales – Cost of Sales = Net Sales – Cost of Sales Operating IncomeOperating Income = Gross Profit – Operating = Gross Profit – Operating

Expenses- DepreciationExpenses- Depreciation

where Operating Expenses comprisewhere Operating Expenses comprise SG &A Selling General and Administrative Expenses. SG &A Selling General and Administrative Expenses.

general overhead, administrative, sales, general overhead, administrative, sales, marketing, and some other expenses are listed. In marketing, and some other expenses are listed. In general, operating expenses are the costs general, operating expenses are the costs (expenses) associated with keeping the doors (expenses) associated with keeping the doors open, generating business, and filling orders open, generating business, and filling orders

R&D expenseR&D expense Expense associated with developing new productsExpense associated with developing new products How much is appropriate?How much is appropriate?

And Depreciation isAnd Depreciation is

Income StatementIncome Statement

Income StatementIncome StatementDepreciation Depreciation Records the loss in value of a fixed asset. Records the loss in value of a fixed asset. Purpose is to spread the initial Purpose is to spread the initial

purchase price of the fixed asset over purchase price of the fixed asset over its useful life. its useful life.

Used for purchased machines, Used for purchased machines, equipment ,some software equipment ,some software

A "non-cash" charge. i.e. no money is A "non-cash" charge. i.e. no money is actually paid at the time in which the actually paid at the time in which the expense is incurred. expense is incurred.

Operating Margin = Operating Margin = Operating Income/SalesOperating Income/SalesHow profitable are the How profitable are the companies lines of companies lines of business?business?

Income StatementIncome Statement Earnings before Interest and Earnings before Interest and

Taxes (EBIT)=Taxes (EBIT)=Operating Income – other income Operating Income – other income

(loss) – extraordinary income (loss)(loss) – extraordinary income (loss)

Income StatementIncome StatementAnd Finally, the bottom lineAnd Finally, the bottom lineNet Earnings= Net Earnings=

EBIT – Interest expense EBIT – Interest expense (income)- tax expense (income)- tax expense (refunds)(refunds)

Income statementIncome statementEBITDA (Earnings Before Interest, EBITDA (Earnings Before Interest,

Tax, Depreciation and Tax, Depreciation and Amortization – EBITDA) Amortization – EBITDA) How much money a company How much money a company would have made if it didn’t have would have made if it didn’t have to pay interest on its debt, taxes, to pay interest on its debt, taxes, or take depreciation and or take depreciation and amortization charges. amortization charges.

What is the value of EBITDA?What is the value of EBITDA?

Some Key issues with Some Key issues with income statementsincome statements

Check year to year trendsCheck year to year trends Can still go broke with a profitable Can still go broke with a profitable

businessbusiness Compare with competitors/industryCompare with competitors/industry Check R&D expense as a % of sales. Is it Check R&D expense as a % of sales. Is it

appropriate?appropriate? Look at each of the line items and test for Look at each of the line items and test for

robustness. robustness. e.g. What is the interest expense? From e.g. What is the interest expense? From

Balance sheet what would happen if interest Balance sheet what would happen if interest rates rose?rates rose?

Gross MarginGross Margin Each product has a gross marginEach product has a gross margin Gross Margin= price - direct cost Gross Margin= price - direct cost

of productof product Products can be created and Products can be created and

pruned on the basis of their pruned on the basis of their Gross Margins. Gross Margins.

Issue with Internet is that the Issue with Internet is that the Gross Margins were too thinGross Margins were too thin

Gross Margin of ProductGross Margin of ProductGross Margin =Sales Price – Cost Gross Margin =Sales Price – Cost

of Saleof Sale

Consider GM1=SP1-CS1Consider GM1=SP1-CS1GM2=SP2-CS2GM2=SP2-CS2GM3=SP3-CS3GM3=SP3-CS3

Can compare and decide which to Can compare and decide which to buildbuild

Balance SheetBalance Sheet The theoretical value of the The theoretical value of the

enterprise if you were to enterprise if you were to purchase it, liquidate the assets, purchase it, liquidate the assets, and shut its doorsand shut its doors

Unlike an income statement, it Unlike an income statement, it doesn’t cover a range of dates doesn’t cover a range of dates but is a snapshot.but is a snapshot.

Why is this statement important? Why is this statement important? 

Balance SheetBalance Sheet Assets include all the things of value Assets include all the things of value

that are owned or due to the businessthat are owned or due to the business Liabilities represents a company's Liabilities represents a company's

obligations to creditorsobligations to creditors Stockholders Equity represents the Stockholders Equity represents the

owners’ investment in the company owners’ investment in the company Basic “Law”Basic “Law”

Assets = Liabilities + Stockholders Assets = Liabilities + Stockholders Equity Equity

Balance Sheet Balance Sheet AssetsAssets

Current AssetsCurrent Assets mature into Cash in <12 months mature into Cash in <12 months Cash Cash Accounts Receivable (A/R) Accounts Receivable (A/R) Inventory (Inv) Inventory (Inv) Notes Receivable (N/R) Notes Receivable (N/R) Prepaid Expenses Prepaid Expenses Other Current AssetsOther Current Assets

Non-Current AssetsNon-Current Assets mature into cash > 12 months. mature into cash > 12 months. Net Fixed Assets Net Fixed Assets

Land Land Building Building Machinery and Equipment Machinery and Equipment Furniture and Fixtures Furniture and Fixtures Leasehold Improvements Leasehold Improvements

Investment into Subsidiaries Investment into Subsidiaries Intangibles Intangibles Other Assets Other Assets

Balance SheetBalance SheetAssets (cont.)Assets (cont.)

IntangiblesIntangibles Goodwill (examples a strong brand Goodwill (examples a strong brand

name, good customer relations, name, good customer relations, good employee relations)good employee relations)

Research and Development Research and Development Patents Patents Market KnowledgeMarket Knowledge Organizational Expense Organizational Expense

Balance SheetBalance SheetLiabilitiesLiabilities

Current liabilitiesCurrent liabilities need to be paid in < 12 need to be paid in < 12 months months

Accounts Payable -- Trade (A/P) Accounts Payable -- Trade (A/P) Accrued Expenses (e.g. wages)Accrued Expenses (e.g. wages) Notes Payable -- Bank Notes Payable -- Bank Notes Payable -- Other Notes Payable -- Other Current Portion of Long term DebtCurrent Portion of Long term Debt Non-Current LiabilitiesNon-Current Liabilities obligations that are due obligations that are due

in > 12 monthsin > 12 months Non-current Portion of Long Term DebtNon-current Portion of Long Term Debt Contingent Liabilities (e.g. guarantees, lawsuits) Contingent Liabilities (e.g. guarantees, lawsuits)

Balance SheetBalance SheetStockholders EquityStockholders Equity

Stockholders' EquityStockholders' Equity the the remainder of the company's remainder of the company's assets assets

Common stockCommon stock Preferred stockPreferred stock Treasury stockTreasury stock Retained earnings Retained earnings

Some Financing Issues Some Financing Issues Advantages and Disadvantages Advantages and Disadvantages

in Financing (getting cash) in Financing (getting cash) through Debt or Equity i., e., through Debt or Equity i., e., bonds/loans or stocksbonds/loans or stocks For new companyFor new company For established companyFor established company For fast growing companyFor fast growing company For business cycle companyFor business cycle company

Debt to Equity RatioDebt to Equity Ratio How is this a function of How is this a function of

industry?industry?

Transportation and warehousing Debt to equity ratio

Air transportation 3.4

Finance and insurance Debt to equity ratio

Commercial banking 15.1

Savings institutions, credit unions & other 13.8

Arts, entertainment, and recreation

Debt to equity ratio

Other arts, entertainment, and recreation 5.1

Amusement, gambling, and recreation industries 2.6

Agriculture, forestry & fishing Debt to equity ratio

Agricultural production 1.6

Utilities Debt to equity ratio

Electric power generation, transmission & distribution 2.2

Cash Flow StatementCash Flow StatementPeriod statement does not have to Period statement does not have to

balancebalanceFinancial document detailing the exchange Financial document detailing the exchange

of cash between a business and the of cash between a business and the outside world outside world

From OperationsFrom Operations cash made (lost) by selling goods and services cash made (lost) by selling goods and services

Flow from FinancingFlow from Financing cash company raised by selling stocks and cash company raised by selling stocks and

bonds bonds Flow "out" to InvestingFlow "out" to Investing

cash the company spent investing in its future cash the company spent investing in its future growth growth

  Consolidated Financial Statements

Cash Flow Statement(

 

(dollar figures are in thousands) 1997 1996

Earnings $ 1,911 $ 1,374 Non-cash Adjustments: Depreciation 1,024 783 Other Adjustments to Earnings 43 -16

Net Cash provided from Operations 2,978 2,141

Proceeds from Issuing New Stock 384 247

Payments to Repurchase Stock -396 -278

Stock Dividends Paid -10

Net Cash provided from Financing - 22 - 31

Cash Flow Statement (cont.Cash Flow Statement (cont.

EntrepreneurshipEntrepreneurship PositivesPositives

Act of CreationAct of Creation PassionPassion Habit-FormingHabit-Forming Large potential cash-outsLarge potential cash-outs

NegativesNegatives Failure is the NormFailure is the Norm 24/7 existence24/7 existence Compromises Compromises family, family, building a “total” rounded personbuilding a “total” rounded person Self doubtSelf doubt

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Subjects very imperfectly Subjects very imperfectly coveredcovered

EthicsEthics FinancingFinancing Corporate structureCorporate structure Choosing a TeamChoosing a Team Operational challengesOperational challenges Liquidity EventsLiquidity Events Legal considerationsLegal considerations Human ResourcesHuman Resources Outsourcing Outsourcing

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For the final, consider including For the final, consider including Ethics and Social Responsibility Ethics and Social Responsibility guidelines for your company. guidelines for your company.

History of Entrepreneurship History of Entrepreneurship Classes at Caltech Classes at Caltech

Started by Prof. John Baldeschwieler c. 1995Started by Prof. John Baldeschwieler c. 1995 Entrepreneurial Fellows Program 2001-2002Entrepreneurial Fellows Program 2001-2002 Ken takes over E 102 in 2003. This is the Ken takes over E 102 in 2003. This is the

tenth iterationtenth iteration Many professors have contributed to this Many professors have contributed to this

classclass Some projects (typically in a different form) Some projects (typically in a different form)

have gone on to be businesseshave gone on to be businesses

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Major advantages for Major advantages for students students (my view)(my view)

Learning something about business. Learning something about business. Remember the synthesis argument.Remember the synthesis argument.

Learn something about EntrepreneurshipLearn something about Entrepreneurship Helpful for self-exploration Helpful for self-exploration Realistic problems to work onRealistic problems to work on Team skillsTeam skills Helpful in interviewing for consulting or Helpful in interviewing for consulting or

technology positionstechnology positions Relief from “formal methods” courses?Relief from “formal methods” courses?

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Issues (my darkest view)Issues (my darkest view) Superficial- one quarterSuperficial- one quarter Not an accurate simulation- an Not an accurate simulation- an

academic exerciseacademic exercise I tell you what to do. This is not I tell you what to do. This is not

how entrepreneurship workshow entrepreneurship works Varying degrees of commitmentVarying degrees of commitment

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My course line-upMy course line-up Fall, Winter: ME 105 a,b Design of Fall, Winter: ME 105 a,b Design of

Products for the Developing WorldProducts for the Developing World Spring 2012: E 102 Entrepreneurial Spring 2012: E 102 Entrepreneurial

DevelopmentDevelopmentSpring 2013: ME 103 Management of Spring 2013: ME 103 Management of TechnologyTechnology

Also, Independent Study CoursesAlso, Independent Study Courses SURFsSURFs

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Caltech and EntrepreneurshipCaltech and EntrepreneurshipA Virtuous CycleA Virtuous Cycle

CaltechBasic

Researchand

Education

Spin-out

NewCompany

CorporateNew

Product

IPOWealth

Taxes and jobcreation

Profits Taxes and job creation

Research funding

Philanthropy

AcknowledgementsAcknowledgementsVedranVedranMentorsMentorsSpeakersSpeakersProfessors and student idea Professors and student idea

providersprovidersClassClass

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