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Entrepreneurial Pursuits with a Penn State Smeal MBA

The SMEAL Innovation and Entrepreneurship Concentration teaches students to spot and build opportunities, communicate bold ideas to stakeholders, undertake due diligence on new opportunities, start and grow a new business, and even create entirely new businesses using IT within “virtual company structures.” Students also function as venture capital partners through the Garber Venture Capital Fund and work directly with other venture capital and angel investment groups.

Entrepreneurship is not necessarily starting your own business. Entrepreneurship is a set of management skills that can be learned and applied to many, if not all, business situations. Entrepreneurs exhibit a range of valuable skills: they find opportunities where others are blinded by internally focused thinking, they understand how value can be created from these opportunities, they communicate their ideas to attract key stakeholders, and then they build value usually through resources that are initially not entirely under their control. These skills

apply equally to start-ups and corporate development.

Entrepreneurship is about creating value through innovation. Innovation is not only through technology or new products, but encompasses new business models, new methods of financing, creating markets, etc. Dell, Southwest Airlines, and GE are just as entrepreneurial as any Silicon Valley start-up. Entrepreneurship demands and integration of financial, marketing, management, communication, and personal skills.

How will SMEAL prepare you?

Paths of AlumniWe firmly believe that

innovation and an entrepreneurial mindset can be learned. The faculty at Smeal approaches the discipline with a problem-based learning pedagogy. Students are exposed to opposing sides of a deal; understanding each perspective.

While there is no progression (and therefore no prerequisites), the coursework prepares the student to explore ideas, recognize opportunities for

CONCENTRATION ELECTIVE COURSES

(see fourth page for course list)

In order to complete a concentration in innovation and entrepreneurship, you need to complete a total of ten (10) credits from the available courses.

Of the 10 credits required in a concentration, six of those credits (three courses) must be taken from a primary list of approved courses. The remaining four credits (two courses) will be taken from the primary list of courses or from a secondary list of currently approved courses.

It is also possible to petition the MBA Office to have a course added to that secondary list of approved courses.

CONCENTRATION DESCRIPTION SERIES

SMEAL COLLEGE OF BUSINESS

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Innovation and

Entrepreneurship

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innovation, and be able to pursue the idea in a corporate setting to to create a company from scratch.

Unique Coursework

The Garber Practicum The Garber Fund is used within a course

environment for Smeal MBA students to experience first-hand all aspects of venture capital investment. The fund, established in 1999 thanks to a $5 million commitment from Penn State Alumnus Dr. John Garber and his wife Bette. The Practicum brings reality to the teaching of entrepreneurism and venture capital by enabling MBA students to become actively involved in the process of equity investment and new ventures. This includes deal sourcing, due diligence, term sheet negotiations, closing, monitoring investments, engineering exits, and managing the portfolio.

Students examine current investment opportunities and decide whether to invest from the fund in a particular transaction. Interaction with external private-equity groups provides an opportunity for students to experience the complexities and pressures of the volatile private equity sector.

Portfolio CompaniesDiamondBack Truck Covers Inc. is a company founded by two Penn State engineering students based on their final year projects. The company now employs 20 people in Phillipsburg and has generated millions in revenue. The fund has invested in two rounds as well as providing interns to help the company to formulate its marketing strategy. The management team is looking for an exit sometime in the next 2-3 years. The Garber fund owns nearly 20% of this company and expects to generate a healthy risk-adjusted return.

Indigo Biosciences Inc. is a State College company providing unique frozen assays to screen drug potentials in the early stages of development. Founded by two PSU faculty members, the Garber Fund has invested in a first round, Series A offering, and successfully placed a new CEO. The company has moved from early concept to product manufacturing and sales. In the Spring of 2009, students elected to provide the company with follow-on funding to support the company’s commercialization efforts. The fund owns 20% of this company in preferred stock.

Go2Athlete Inc. is a State College company founded by Smeal MBA alum, Chris Ganter. This company is a social networking site for student athletes, their resident schools, and alums. The company has contracted with major NCAA sports programs and is now focusing on the NFL and other professional franchises. The Garber Fund has contributed to an initial seed round in the form of convertible preferred stock and is considering a follow-on round.

HireVue Inc. is a Draper, Utah based company that provides video interview services to large and small businesses seeking to improve their initial applicant screening and reduce recruiting costs. The firm’s customers include Rio Tinto, Google, and Oracle. The Garber Fund invested in the company in the Spring of 2009. Since then, the company’s sales have continued to grow and the company is expanding.

ALUMNI PERSPECTIVES

INVESTOR NEWSLETTER ISSUE N°3 FALL 2009CONCENTRATION DESCRIPTION SERIES

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CONCENTRATION DESCRIPTION SERIES

SMEAL ALUMNI

“There have been few defining times that have really driven my success. Being a part of the entrepreneurship program at Smeal was one of those times.  Fundamentally, Dr. Warren taught me to 'think.'  Sounds simple...but the ability to look at things differently, understanding and driving change, and never settling for the status quo were all things I learned as a part of the entrepreneurship program.  These were also things that have been keys to my success.  I'm truly grateful for the experience.”

“The Smeal entrepreneurship program provided a tremendous foundation for my career in seed stage venture capital. The portfolio provided opportunities for business idea generation, business plan development, and evaluating business plans. The portfolio emphasizes out-of-the box thinking and teamwork which are critical in today’s business world. The business plan development coursework and evaluation of business plans through the Garber Fund were particularly helpful to me. I started with the LSGPA after graduating from Smeal in 2004 and spend the majority of my time reviewing business plans and evaluating businesses for possible

investment.“ 

“As VP of Business Development at Outcast Media, an early stage company in the burgeoning sector of digital out of home media, I am responsible for expanding the reach of our network through the establishment of strategic partnerships and joint ventures and maximizing the value of our platform through product and service innovation. In this role, I frequently use many of the practical skills learned through the course of study in the Entrepreneurship concentration at Smeal  including company valuation techniques, equity structure development, and due diligence processes. Additionally, and perhaps more importantly, the program effectively cultivated a way of thinking and an approach to dealing the unique issues and challenges inherent to entrepreneurial companies. With a focus on providing real world experience in an educational setting, the Entrepreneurship program provided an excellent foundation for me to succeed in an early stage, rapid growth organization and continues to serve me well in my role at Outcast.”

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Mr Erhardt Preitauer

Executive Director,Ohana Health Plans

Mr. Steve CarpenterVice President,

Venture OperationsLife Sciences

Greenhouse of Central PA

Mr. Daniel TrotzerVP of Business Development atOutcast Media

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Primary Course ElectivesPrimary list of courses (3 courses/6 credits must be taken from primary list; remaining 2 courses/4 credits can

be taken from primary or secondary list)

Course No. Course Title Mod Offered

ENTR 500 Innovation and Entrepreneurship Mod 4

ENTR 502 Starting and Growing a Business Mod 5

MGMT 551 Growth Innovation Strategy Mod 7

ENTR 504 Business Planning Mod 7

ENTR 571 Applying Entrepreneurship Across Corporate

Boundaries

Mods 7-8

Prerequisites:None

Secondary Courses Electives

Course No. Course Title Mod Offered

MGMT 531 Strategy Implementation and Organizational Change Mod 5

MGMT 520 Team Facilitation Mods 5-6

MGMT 597B Team Facilitation Team Labs Mods 5-6

MKTG 542 New Product Development Mod 6

MGMT 521 Complex Negotiations Mod 7

BLAW 525 Business Law for Innovation and Competition Mod 8

Secondary list of courses (remaining 2 courses/4 credits from secondary or primary list)

CONCENTRATION DESCRIPTION SERIES

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CONCENTRATION COURSEWORK AND ELECTIVES

**Courses and requirements are subject to change