INSEAD-Wharton Entrepreneurship Network Launch event 3rd October 2002 at 3i in London Summary Notes and Voting Results

INSEAD-Wharton Entrepreneurship Network

Launch event 3rd October 2002 at 3i in London

Summary Notes and Voting Results

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List of content

1. Welcome and introduction

2. Opening Address by Professor Christoph Zott

3. Introduction to break-out sessions

4. Break-out sessions

5. Feed back from break-out sessions and voting

6. Concluding address by Brian Larcombe

7. Pre-dinner speech from Sir Paul Judge

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• Test the audience: “Are you in the right entrepreneurial mood?”

• Exercise 1: Close eyes….Paradigm shift occurs: people are 2 feet tall instead of 6 feet…What new business opportunities present themselves? Examples of answers: new closing, food delivery, etc

• Exercise 2: Close eyes…. Go back to when you were14/15yrs…… What did you feel back then? Examples of answers: freedom, sport, sex, lots of energy etc…. Entrepreneurs behave in similar ways as teenagers

• Take away: Two very important differentiating characteristics of entrepreneurs: Mood/Behavior and Judgement

Patrick Dunne: Introduction

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• Insead UK alumni: Large and active community (3100 members)

• Next 3 events already sold out…great enthusiasm for entrepreneurship

• 10-20 % of members are entrepreneurs, 5-10 % are active in Private Equity

• Today is start of INSEAD-Wharton Entrepreneurship Network with ambitious objectives

• Another big entrepreneurial event planned for February with small ones in between

Jonathan Knight: Introduction

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• Prof:How create value, how obstacles can be overcome, implications for the network….networks do create value• Example: Wharton PE Alumni network (inlc Penn)…400 members…objectives: education,networking,increase awareness,access research/knowledge,interaction students,alumni,

faculty…..evidence of value created by network• Entrpreneurs and VC operators are very cagy with info….research difficult, as data sparse• mentoring is critical for students in start-ups• How can the network help what entrepreneurs do?• Creating legitimacy early enhances success considerably• Emotional support is also very important and can be provided by networks• Diversity in network key, but tendency is to form homogeneous networks, limiting the value of network

Sandeep Sander: Introduction

• Let’s get a good start of this network. You never get a second chance to make a first impression

• Many have been working - but really it is up to all of you to interact

• Ideas will be presented - but it is a first draft - we are still in the process of developing the concept for the network

• I am certain we can make a difference. When we started talking to Professors they were very positive about documenting this by research - but later on we were told it is hard to tell which factors that make the difference.

• Let’s show that we as a network can make such a difference that even Professors can measure the impact !

INSEAD-Wharton Entrepreneurship Network

Launch event 3rd October 2002

Presentation by Sandeep Sander

Chairman of the Entrepreneurship Network

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Testing the voting

• Type 1

1__________________5___________________10Not important Important Very important

• Type 2

1__________________5___________________10Disagree Agree Strongly

agree

• Type 31 = option 1

2 = option 2

10 = option 10

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Testing the voting

• Why did you join?

1 = the speakers

2 = the concept/the idea

3 = the network

4 = other reasons (ie avoiding the queue at London eye)

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Vote 1: Why did you join today ?

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Th

esp

eake

rs

Th

eco

nce

pt

Th

en

etw

ork

Oth

erre

aso

ns

%

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Vote 2: Why are you here today / your role

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101520253035404550

En

trep

ren

eurs

Inve

sto

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Kn

ow

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lum

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Entrepreneurs

Investors

Knowl Alumni

Others

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Mission of Entrepreurship Network

“To encourage entrepreneurship

and to make INSEAD/Wharton

entrepreneurship activities more successful”

“To encourage entrepreneurship

and to make INSEAD/Wharton

entrepreneurship activities more successful”

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Entrepreneurs Investors

“KnowledgeAlumnus”

The Winning Team

Making all three groups overlap creates higher success rate

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The Target Groups

2.Entrepreneurs

3.Investors

4. “KnowledgeAlumnus”

1. Clients/customers among alumnus Alumnus

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Ideas making our network unique

• The network provides unique opportunities to all three groups of stakeholders

• The network provide insights you can’t get elsewhere

• The network database will be outstanding

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The unique offers to Entrepreneurs

1. A strong, action oriented network organisation

2. Outstanding net of contacts in the UK and abroad

3. Knowledge transfer

4. Access to funds and other resources

5. Possibility for mentoring and other ways of alumnus support

6. Keeps you up-to-date in the entrepreneurship area

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The unique offers to Investors


2. Outstanding opportunity to meet entrepreneurs

3. Knowledge transfer opportunity

4. Opportunity to invest in entrepreneurs plus a supporting network

of experienced alumnus


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The unique offers to “Knowledge Alumnus”


2. Outstanding opportunity to become part of a venture without

being investor or entrepreneur on full time

3. Knowledge transfer

4. Possibility for becoming a mentor


6.

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The unique offers to Sponsors

1. Possibility to be at the core of a strong, action oriented network

organisation

2. Outstanding opportunity to position the company among a wide groups

of alumnus and in the press

3. Opportunity for market knowledge transfer

4. Possibility for becoming preferred investor


6.

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List of content








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• How to create value? How can obstacles can be overcome? What are implications for the network? My main point is that networks do create value

• Example: Wharton PE Alumni network. 400 members. The objectives are: education,networking,increase awareness,access research/knowledge,interaction students,alumni, faculty. There is clear evidence of value created by network

• Entrepreneurs and VC operators are very cagey with info….research difficult, as data sparse

• Mentoring is critical for students in start-ups• How can the network help what entrepreneurs do?• Creating legitimacy early enhances success considerably• Emotional support is also very important and can be provided by networks• Diversity in network key, but tendency is to form homogeneous networks,

limiting the value of network

Professor Zott: How can the network be valuable to Entrepreneurs?

Please see separate file for detailed presentation

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• Main value creation element comes from sharing knowledge• All sources of knowledge are correlated to the increased success of economic performance (study of

Gimeno) • Mentoring and overcoming loneliness are two other important value add elements which the network could

offer• Experience shows that successful entrepreneurs draw on a small, tight community of personal relationships• Most of us have 4-8 strong personal ties….if too many of those ties are in the family, they may restrict

entrepreneurial behavior• Various aspects of the business model for the network need to be defined ---- structure, content and

governance• Novelty and efficiency could be key differentiators of network…..call for action…..Innovative idea: Network

could contract with publisher to disseminate info in series of small books…Example titles: How do you spot and hire talent?; How to structure compensation ?; How do you succeed in the start-up phase? Etc

• Mentoring and personal networks were believed to be very important to entrepreneurial success by 70%• 60-65% of all attendees followed entrepreneurial classes, similar % for entrepreneurs

Professor Zott: How can the network be valuable to Entrepreneurs?

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Vote 3: Did you attend a Entrepreneurship course ?

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YES NO

YES

NO

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Vote 4: How important are mentors ?

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1 2 3 4 5 6 7 8 9 10

%

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Vote 5: How important are social ties /network ?

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1 2 3 4 5 6 7 8 9 10

%

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Vote 6: Did you attend a Entrepreneurship course ?

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70

YES NO

YES

NO

Entrepreneurs only

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List of content







7. Pre-dinner speech from Lord Young of Graffham

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Break-out sessions

• Break-out sessions. We are pleased that a group of outstandingly successful alumni have agreed to act as moderators:

– 502. Michele Appendino, Founder & Managing Director, NetPartners

– 501. Sebastian James, CEO, Longwall Holdings– 503. William Kendall, CEO, Whole Earth Foods &Founder

Covent Garden Soup Co.– 505. Julie Meyer, CEO, Ariadne Capital and Founder First

Tuesday– 504. Pietro Strada, Founder & Director, Arma Partners– 508. Caroline Whitfield, CEO, RA Technology Partners

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List of content







7. Pre-dinner speech from Lord Young of Graffham

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• Issue #1: All entrepreneurs see good quality deals that do not meet their criteria AND No entrepreneurs see enough quality deals that do meet their criteria…..Idea # 1: Network provides deal sourcing services by establishing a database of reject deals from others…Altruistic (like giving blood)….Individuals who reject should be named….Only deals which you would do yourself (if they met your criteria) should be included…..Measurement of success: number of deals executed through this route

• Issue #2: It is hard to know fellow network members to usefully open a conversation….Idea #2: Targeted, regular break-outs by sector and by function with introductions: Background, Desire/Objective becomes known, Face to a name

• Issue #3: People prefer high net worth funders to PE houses/VC funds….Idea #3: Link network with Family Business Conference and screen deals for penetration to rich alumni

IDEA’s from Break-Out Sessions

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• Issue # 4: Many entrepreneurs can’t get seed capital….Idea # 4: Network to provide database with funds who specialize in seed/early stage; Funds can be better approached indirectly by someone who has obtained finance by that fund than directly

• Issue # 5: Mentors are urgently needed and many experienced entrepreneurs would be interested to help for “some upside”…Idea #5: Create database for demand/supply of mentors and arrange intro’s

• Issue # 6: Entrepreneurs do not always understand what PE/VC firms want….Idea # 6: Network to provide training/coaching with all the required insights

• Issue # 7: Entrepreneurs often look for partners who have complementary skills/capabilities to their own….Idea # 7: Network to provide database with extensive skills/background info and search capabilities

IDEA’s from Break-Out Sessions

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Present situation and challenges for entrepreneurships

TOP 5 issues (prioritized):

1. Problems in genrating early sales

2. Lack of mentoring/coaching opportunities

3. Loneliness and riskiness of new venture

4. Credibility gap

5. Difficult to raise money/Equity Gap

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Present situation and challenges for entrepreneurships

All results (sorted by priority)

1. Problems in generating early sales

2. Lack of mentoring/coaching opportunities

3. Loneliness and riskiness of new venture

4. Credibility gap

5. Difficult to raise money/Equity Gap

6. How to find business angels/high networth individuals

7. Need for easy access to knowledge/network

8. Difficult to forecasts / see trends

9. Difficult to attract talent

10. Buyers focus on ROI and freeze on capital expenditure

11. Too much time vatsed on VCs / fund raising

12. The network need more access to sector knowledge

13. Lack of quality opportunities

14. Difficult to build (strong) network

15. Less flexibility / less imagination in the market

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Ideas for what our network should be used for

TOP 5 ideas to implement:

1. Extensive database ++++

2. Enable mentoring/coaching

3. Smaller more intimate & focused events, regularly

4. People matchmaking

5. Provide support to members of the network

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Ideas for what our network should be used for

All suggestions ( prioritised):

1. Extensive database ++++

2. Enable mentoring/coaching

3. Smaller more intimate & focused events, regularly

4. People matchmaking

5. Provide support to members of the network

6. Support for sales acceleration

7. Expand network

8. Help understand how venture capital/funding thinks

9. Efficiency service, sharing infra structure across ventures

10. Reduce need of equity through networking

11. Facilitate “out of the box” thinking

12. Skills development

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• Getting initial sales big challenge…. Support for sales acceleration important

• Loneliness big issue…..Network can provide emotional support

• Mentoring during start-up phase vital and needed urgently

• Many more frequent smaller meetings needed

• People Matching services to bridge skill gaps is in demand

• Not so important to expand the network

• 80% believes database++++ is key

• Out of box thinking and skills development not important

Voting Plenary: Key take aways

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List of content








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• For copy right reasons we are unable to provide the presentation

• Please see summary notes on the following pages

Brian Larcombe: The 3i Experience

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• Private Equity(PE)/ VC means different things for different people at different stages in career

• 75% of 3i’s business is PE/Buy-outs, 25% early stage financing

• Successful relationship of 3i with Robert Wright started in 1983: Sold airline to air europe which then went bust... Bought back again, restructured and relaunched as Cityflier which was sold to BA for £275 million….privatization of London buses: Bought for £27 million, sold for £ 63 million…..Bought “Go” for £ 100 million, sold for £ 300 million, 1 year later…..Key take away: Emphasis was on management quality as transportation industry itself does not generate much profits

• Characteristics of successful entrepreneurs: luck (cycle based), leadership, resilience, vision, innovation (philleas frog chips), seize the opportunity, sense of ownership, spotting trouble ahead (protecting the downside), integrity (dishonest people do not get second chance), taking advice, teams (not just individuals)

• “Hot” sectors are often full of danger... returns for late entrants are low• what´s new: last 2-3 yr different; good time to invest now, based on basics(similar to best investment

climate of 92-94 in UK…..late entrants in late 90’s have learned their lessons hard• lessons learned at 3i: timing mistakes in 2000, but made lot of money…will make mistakes in future


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• What´s new? : The last 2-3 years have clearly been tough…. good time to invest now, based on fundamentals (similar timing of the cycle as in 1992-1994 UK recession….Proved to be best investment climate with highest returns…..late entrants in late 90’s have learned their lessons the hard way

• “Hot” sectors are often full of danger... returns for late entrants are low

• Lessons learned at 3i: timing mistakes in 2000, but still made a lot of money during the bubble…will always make some mistakes in future

• Would consider backing someone again who has gone bust in an earlier venture


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Last Vote : How relevant are 3i’s services to you ?

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Outline for the Event 25th February 2003

Objectives Encourage entrepreneurship and make INSEAD /Wharton entrepreneurship activities more successful

Follow -up the entrepreneur initiative Provide the first examples of results

Format An afternoon/ evening program in London withpresentations, interactions, networking and work insmaller teams. Also social activities including dinner

Target groups Entrepreneurs, investors, Knowledge Alumnus andpotential clients

Content Lecture with interactions via voting pads Networking Work in smaller teams

Outcome Awareness of the entrepreneurship initiative Extending the group of people involved Knowledge transfer and networking A new deal or an improved venture that we can highlight

on the website and/ or in INSEAD/ Wharton magazines

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Dr. Raphael (Raffi) Amit

• Professor Amit is Robert B. Goergen Professor of Entrepreneurship and Professor of Management at the Wharton School, University of Pennsylvania

• He is also Academic Director of the Goergen Entrepreneurial Management Programs

• He is Founding Director of The Wharton e-Business Initiative

• We are pleased to announce the key note speaker at the event 25th February 2003:

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Dr. Philip Anderson

• INSEAD Alumni Fund Chaired Professor of Entrepreneurship at INSEAD

• Director, 3i Venturelab

• Area coordinator for Entrepreneurship and Family Enterprise at INSEAD

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Next Steps

• Distribute documentation of the 3rd October - to all 380+ persons who so far have signed up

• A Committee meeting• A meeting for investors• A meeting for sponsors• Complete concept development• Develop ideas for other activities• ACTION !

Documents

INSEAD-Wharton Entrepreneurship Network Launch event 3rd October 2002 at 3i in London Summary Notes and Voting Results