Life cycle of an entrepreneurial venture

Prepared By:

Nijaz N

Life-cycle stages• What is born today, Must die tomorrow

1.  The ‘IDEA’

2. Growth

3. Shakeout

4. Maturity

Entrepreneurial Lifecycle Chart

The ‘IDEA’ (Stage 1)

• INCUBATION CENTRE (e.g. Hi-Tech Products)

• Designing and Prototyping the product

•  Test marketing

• Developing customer & supplier base

Growth (Stage 2)

• Entrepreneur goes for expansion through:

1. Capturing Market Share

2. Differentiating

3. Expanding channels

4.  Training and Expanding the core team

5. Acquiring resources

• Entrepreneur Focuses on:

1. Developing Operational Systems

2. Achieving Sales growth

3. Increasing market Share

4. VCs bring in important Value Additions

Shakeout (Stage 3)

• Period of Continuous Growth

• Company is now big enough to be ‘noticed’

• Entrepreneur goes for:

1. Rapid growth and professionalization

2. Attempts for Market Leader Position

3. Broadens product/service lines &geographical coverage

•  To carry on Continuous Growth:

1. New Venture Strategies

2. Continuous Innovations

• In a position to approach the Banks for Debt Funding

Maturity (Stage 4)

• Entrepreneur’s Alternatives regarding future

1. Evolve the company

2. Partial/Full management buy-outs

• Founder’s Vision and Objectives

• May Cash-out to start another business