COURSE SYLLABUS

School of Management
The University of Texas at Dallas

Course: BPS 6370

Instructor: Dr. David Deeds
Semester: Spring ‘06
Course Start/End Date: 1/09/2006 to 4/25/2006

| Course Information | Technical Requirements | Course Access | Communications |

| Student Assessment | Scholastic Dishonesty | Course Evaluation | Course Schedule |

Course Information

Course Description

This course has been designed to provide an overview of the entrepreneurship process by focusing on new
venture creation from idea generation and opportunity recognition to feasibility analysis and business
formation. The course will require you to integrate your current knowledge of business functions and
apply techniques of business analysis from other courses to the analysis of venture opportunities.
The readings will provide a framework for understanding the entrepreneurial process and evaluating new
venture opportunities, exploring the sources and processes of innovation, and developing an
understanding of the various methods and techniques available for evaluating new business opportunities.
Case studies will be used to explore the various steps involved in evaluating, creating and launching a
new business venture, including assessing and acquiring the required resources, structuring the business,
arranging financing, and managing the growing enterprise. We will also explore the identification,
evaluation and acquisition of existing businesses, and the important activity of harvesting the value
created by the entrepreneurial venture.
The two most important economic issues to be addressed with respect to a new venture idea are: (a) what
is it worth (today and at some future point in time)?; (b) how much cash will it take to get to that future
point? The ability to analyze historical financial information, develop multi-year financial projections in
MS Excel, and conduct various valuation analyses is essential to the case analysis process.
Both group and individual assignments will be required, with individual assignments and class
participation comprising approximately half of the final grade, and group activities accounting for the
remainder. A group project focused on the identification and evaluation of a new business opportunity
will comprise a major part of the course.

Instructor Information

Dr. David Deeds

Office: SOM 4.204
Phone: 972-880-5904
E-mail: David.Deeds@utdallas.edu
On-line Office Hours: 11:00 AM – 1:00 PM (CST – Dallas Time) Wednesday

Dr. Deeds is an associate professor at The School of Management at The University of Texas at Dallas.
Prior to coming to The University of Texas at Dallas he held faculty positions at The Weatherhead School
of Management at Case Western Reserve University and The Fox School of Business at Temple
University. He received a Ph.D. from the University of Washington in Seattle in 1994. His articles have
appeared in Inc. Magazine, The Journal of Business Venturing, Entrepreneurship: Theory and Practice,
The Journal of Management Studies, The Strategic Management Journal, Research Policy, The Journal of
Engineering & Technology Management and The Journal of Product Innovation Management. He
received the Mescon Award for best empirical research in Entrepreneurship at The National Academy of
Management meetings in 1996, was awarded the NASDAQ Fellowship in Capital Formation in 1997 and
received The Fast Company Award for best paper on high growth firms at The National Academy of
Management meetings in 2000. His current research interests include the management of strategic
alliances, entrepreneurial finance, and the management of high technology ventures. Prior to pursuing a
career as an academic, Dr. Deeds was co-founder and president of LightSpeed Corporation, a computer
hardware and software developer specializing in custom CAD/CAM computer systems, from 1983-1989.

Course Materials

• Stevenson, H.H.; Roberts, M.J.; Grousbeck, H.I. and Bhide, A.V. 1999. New Business Ventures &
the Entrepreneur. Irwin-McGraw Hill, New York. ISBN 0-256-20477-2
• Drucker, P.F. 1993. Innovation and Entrepreneurship. HarperBusiness, New York. ISBN 0-887-306-
187. (paperback)
• Bhide, A. 1996. The Questions Every Entrepreneur Must Answer. Harvard Business Review Nov-
Dec 1996 (HBR 96603)
• Zider, B. 1998. How Venture Capital Works (HBR Reprint 98611)

Textbooks and some other bookstore materials can be ordered online through MBS Direct Virtual
Bookstore or Off-Campus Books online ordering site. They are also available in stock at UTD Bookstore
and Off-Campus Books.

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Technical Requirements

In addition to a confident level of computer and Internet literacy, certain minimum technical requirement
must be met to enable a successful learning experience. Please review the important technical
requirements and the web browser configuration information.

It is expected that students will have a reasonable understanding of financial accounting and financial
analysis, and a working knowledge of Microsoft Excel. Many of the case analyses will require the
analysis of financial statements, the development of financial projections (including income statements,
balance sheets and statements of cash flow) and the preparation of valuation analyses using MS Excel.
Session 2 and the first written assignment will focus on developing or enhancing your skills in this area.

Course Access and Navigation

This course was developed using a web course tool called WebCT. It is to be delivered entirely online.
Students will use UTD NetID account to login to the course at: http://webct.utdallas.edu. Please see the
details of course access and navigation information.

To get started with a WebCT course, please see the Getting Started: Student WebCT Orientation.
If you have any problems with your UTD account or any problem with the UTD WebCT server, you may
email to: assist@utdallas.edu or call the UTD Computer Helpdesk at: 972-883-2911. If you encounter any
technical difficulties within the course site, please send an email to gmbasupport@utdallas.edu.

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Communications

WebCT course has built-in communication tools which will be used for course interactions and
communications. Some external communication tools such as regular email and web conferencing tool
may also be used during the semester. Please see more details about communication tool information.

Interaction with Instructor: I will communicate with students mainly through the discussion boards.
Students may send personal concerns or questions to me using the course Email tool. I will reply to
student emails or discussion board messages within 3 working days under normal circumstances. Students
may also contact me via phone at my office (972)883-5904.
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STUDENT EVALUATION: COURSE REQUIREMENTS & GRADING:

The course requirements are summarized in the Course Outline section. Supplemental materials may be
provided or posted electronically. The course has been designed to allow flexible management of your
time. There will be no quizzes or exams. Your grade will be based on group and individual written
assignments, your contributions to the discussion boards, and a major group project.

Discussion boards will be scheduled throughout the semester to provide for an interactive dialogue
simulating class discussions. Discussion questions will be posted on Web CT by the Instructor at the
beginning of each discussion period. Responses are due as indicated below. Student responses will be
posted on WebCT and available for viewing by the entire class. Participation will be monitored and
reflected in the Class Participation grade. Students are encouraged to pose additional questions for
discussion as part of the weekly dialogue.

The assignments, their due dates and page limits, and their relative weights in determining your final
grade are summarized in the table below. The evaluation forms that will be used for each assignment are
posted on WebCT.

Peer Evaluation Process

A peer evaluation process will be utilized to adjust individual grades on all group assignments. The peer
evaluation form (form provided on WebCT course site under the Peer Evaluation assignment link and
also linked at the end of this syllabus) will be completed individually and turned in as WA#6 on April
23rd.

Participation
Fifteen percent (30%) of your grade will be based on the quality of your participation in discussion
forums. There are a total of graded class participation events in the course (see table below). Grades will
be assigned on the following basis:
No participation = 0 points
Minimal participation = 1 point
Meets expectations = 3 points
Exceeds expectations = 4 points
 Superior participation = 5 points
The “normal” grade on an class participation assignment will be 3 points, up to 5 points can be earned for
exceptional performance and/or contributions on a class participation assignment.

Discussion boards will open with a series of questions in separate threads on Friday at 12:00 AM Dallas
time. The boards will remain open for discussion until the following Friday at 11:59. Threads may be
added during the week and discussions expanded. You are expected to check the boards regularly and
contribute throughout the week.
Because later submissions will have the advantage of having read the inputs and comments provided in
earlier submissions, the “bar” will raise progressively. I expect each input to add some substantive value
to the discussion, rather than just reiterate what has been said by others (there may be some “first mover”
advantage built into this process).
I will attempt to post participation grades promptly after each Discussion board. I will check these boards
and contribute to them through out the week, but I will try to avoid directly answering questions. The goal
of the boards is to create a cooperative learning environment in which you learn from each other and
exercise your problem solving skills.
Webconference #1 (Business Plan Presentation) is mandatory. In addition to receiving a 0 for class
participation a five point penalty will be assessed against the Individual’s project grade for failure to
participate in this Teleconference. Attendance will be taken approximately 5 minutes into the
teleconference.

Length
Assignment Date Type (pages) Weight
Discussion Board #1 – Self 1/12/07 Web CT 1 Class
Introduction (see template on WebCT) Discussion Participation
Post
Written Assignment # 1 – Case 1/21/07 Individual 3-4 + Excel 10%
Analysis: SplatterMatter Paintguns, (outline form) Worksheet
Inc.
Discussion Board #2: The DAG Group 1/26/07 Web CT N/A Class
case Discussion Participation
Post
Written Assignment # 2 – 2/4/07 Individual 4-5 10%
Opportunities for Innovation (essay form)
Discussion Board # 3 – Case 2/9/07 Web CT N/A Class
Analysis: Ice Delights Discussion Participation
Post)
Discussion Board #4 – Case Analysis: 2/16/07 Web CT N/A Class
Commercial Fixtures, Inc. Discussion Participation
Post
Written Assignment #3 – Business 2/25/07 Group Project 7-10 15%
Opportunity Evaluation (essay form)
Discussion Board #5: Heather Evans 3/2/07 Web CT N/A Class
case Discussion Participation
Post
 Written Assignment # 4 – Case 3/18/07 Individual 5-7 10%
Analysis: Onset Ventures (Essay)
Discussion Board #6: ArthroCare case 3/23/07 Web CT N/A Class
Discussion Participation
Post
Discussion Board # 7 – Case Analysis: 3/30/07 Web CT N/A Class
Allen Lane Discussion Participation
Post
Discussion Board #8 4/6/07 Web CT N/A Class
Gordon Biersch Brewing Company Discussion Participation
Post
Discussion Board #9: Grand Junction 4/13/07 Web CT N/A Class
case Discussion Participation
Post
Written Assignment #5 – New Venture 4/22/07 Group Project 25-30 25%
Business Plan (essay form)
Webconference #1 - New Venture Week of Webconference N/A Included in
Business Plan Presentation 4/23/07 WA#5
Written Assignment #6 - Peer Week of Individual 1 Class
Evaluation Form – Submit using the 4/23/07 Participation
WebCT assignment tool.
Class Participation (Discussion Boards Individual 30%
& Teleconferences)
Overall Course Grade 100%

Assignment submission instructions: You will submit your assignments (in the required file format with
a file name that includes your last name and the assignment number) by using the Assignment Dropbox
tool on the course site. Please see the Assignments icon on the designated page. You can click each
assignment name link and follow the on-screen instructions to upload and submit your file(s). Please refer
to the Help menu or the WebCT Student Guide for more information on using this tool. Please note: each
assignment link can only be used once and will be deactivated after the assignment due time. After your
submission is graded, you may click each assignment’s “Graded” link to check the results and feedback.
For the team project assignment, one group member will submit the assignment for the group and forward
the results and feedback to other members.

GROUP PROJECT: Business Opportunity Evaluation and Analysis

A group project focused on the evaluation and analysis of a new business opportunity will comprise a
major part of the course. This project will have three major deliverables: (a) a preliminary report (WA#3);
(b) a final report (WA#5) providing a thorough analysis; and (c) a 15 minute presentation including power
point slides, during a webconference (Week of April 23rd) highlighting the key points of the business
opportunity.

This project is designed to challenge you:

• To explore where business ideas come from and learn how to determine when a “good idea”
is also a bona fide business opportunity
• To investigate how business analysis techniques can supplement the creative process in
contributing to opportunity recognition and identification
 • To research an industry, using information about industry trends and innovations to identify
opportunities that exist in the industry and to evaluate the industry-level forces that drive the
new business development process
• To research industry competitors to understand how their strategic position and competitive
actions might influence the success of a specific product or service idea or concept
• To design and conduct market analysis to evaluate the business potential of your product or
service idea or concept, including investigating how market conditions and customer
preferences influence opportunity analysis
• To use financial analysis to investigate the business potential of your product or service idea
or concept, including exploring methods of financing new ventures and examining how the
issues of cost, pricing and profit margins impact on opportunity analysis
• To consider other potentially important information such as location, seasonality, human
resource requirements, knowledge and organizational management issues, and hidden costs
that may affect the evaluation of your entrepreneurial product or service idea or concept.
Preliminary Report: Business Opportunity Identification (Written Assignment #3 due 2/25/06)
• Select an industry and identify a specific business idea or opportunity to research.
• Conduct a preliminary evaluation of the business opportunity following the Checklist for
Opportunity Evaluation (download from WebCT). Address items 1-8 in your preliminary
report.
• Summarize your business opportunity in the context of the market and competitive
environment in a 5-7 page paper

New Venture Business Plan (Written Assignment #5 due 4/22/06)

• Prepare a Business Plan for a new venture based on the Business Opportunity you identified
in your preliminary report, following the guidelines provided in Stevenson et al. (Chapters 4
and 11 and Exhibit 11-1).
• Thoroughly evaluate the feasibility and attractiveness of the business idea or concept using
the Checklist for Opportunity Evaluation (all items) and the concepts and frameworks
provided in the text and lectures. Primary market research (talking to prospective customers)
may be an important part of this process. Particular emphasis should be placed on the sources
and sustainability of competitive advantage for your new venture.
• Use analytical techniques from other disciplines (marketing, finance, technology) to evaluate
the strength of the business idea or concept. Market analysis and financial analysis techniques
can be used to uncover weaknesses and identify the strengths of your specific idea or concept.
• Identify the critical competencies that must be mastered in order to ensure the success of the
proposed venture and explain how these will be acquired or developed.
• Prepare pro forma financial projections for the venture (monthly for first year; quarterly for
years 2-3; annual for years 4-5) including a statement of assumptions, income statements,
balance sheets and cash flow projections.
• Prepare a Business Plan for your venture, following the outline provided in Exhibit 11-
1. (Written Assignment #5 due on or before 11:59 PM on April 22). The Business Plan
should not exceed 25-30 pages, not including exhibits or appendices. Thoroughly document
your assumptions and analyses in exhibits or appendices and provide a list of the references
and information sources utilized in your research.
• Present your business opportunity and findings in a 15 minute presentation to the class
during a webconference during the week of April 23, 2006
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 QUESTIONS FOR WRITTEN ASSIGNMENTS
The following discussion questions are provided to help you complete a structured analysis focusing on
the key issues in each case. It is important, in written assignments, to address each of these points. An MS
Excel Template and a Teaching Note is provided on WebCT for each assignment (except WA#1) to assist
you in your analysis. Case solutions will be posted after the due date for submission of assignments (one
day after for Discussion Boards; two weeks after for Written Assignments).
Written Assignment # 1: SplatterMatter Paintguns, Inc. (Session 02)
1. Download case from WebCT. Complete financial analysis problems and develop
spreadsheet analyses based on instructions provided with the case.

Written Assignment #2: Opportunities for Innovation (Session 04)

1. Select an industry that you would like to explore for entrepreneurial opportunities. Briefly
describe the industry and competitive environment.
2. Systematically analyze the industry to identify opportunities for innovation (purposeful
innovation) following the approach outlined in Drucker’s Chapter 2 and detailed in
Chapters 3-10. Identify and describe three unique and different opportunities for potential
innovation in the industry.
3. Support your findings with reference to Drucker’s “seven sources” and appropriate
research and analysis.
Written Assignment # 3 Business Opportunity Identification (Session 07) See Group Project
instructions above.
Written Assignment #4: Onset Ventures (Stevenson: 281-310) (Session 09)
1. Focus on the TallyUp decision from the perspective of ONSET Ventures: (a) should ONSET
invest an additional $1 million to develop a beta product, or go to the market now to raise $3-4
million and use the money for both product development and marketing; (b) should the “step-
up” assumptions be the same under each scenario?; and (c) if they decide to go to the market,
what is an appropriate valuation for TallyUp?
2. Develop a spreadsheet analysis that reflects the ONSET business model and use it to evaluate
the various alternatives. The model should reflect the pre-and post-money valuations of Tally-
up, and the investments and percentage ownership held by ONSET, its venture capital
partners, and Tally-up’s management team as they progress through the various funding stages
projected out through the seed and first two rounds of venture capital financing. Assume a
terminal value equal to the post-money evaluation at the end of the second round. Calculate
the cash flows and IRR for ONSET and its VC partners under each scenario
3. Given the financial return expectations of ONSET and the prospective venture capital
partners, plus the desire of the company to set aside some shares for stock options, how would
the ownership be distributed (post funding) under each alternative?
4. Is this a purely economic decision, or do other factors (risk, consistency with ONSET’s
operating philosophy, etc.) come into play? What risks are involved? How do these other
considerations impact the decision?
5. Focus on the decision from the perspective of TallyUp’s management team: (a) would you
prefer to have ONSET increase its commitment now to develop the beta product, or (b) would
you prefer to go to the market now to raise $3-4 million? How much ownership would you be
willing to give up under each scenario? How would this impact your anticipated return?
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COURSE OUTLINE
Session Readings/Preparation Assignments
S01 What is Entrepreneurship? Discussion Board #1:
Week of Readings: Stevenson: 3-17 (perspective) Self Introduction (see
1/08/07 template on WebCT) &
Prepare for class discussion based on readings and your
entrepreneurial experiences Discussion of the role of
entrepreneurship in the
Lecture: Introduction to Entrepreneurship
economy.
Closes: 1/12/07 11:59
pm

S02 Basics of Financial Analysis

Week of Readings: Teaching Note on Financial Analysis and Projections Written Assignment #1
1/15/07 (WebCT) We will use the ABC Electronics example to illustrate (Individual)–
the kinds of financial analyses required to analyze the cases SplatterMatter
assigned. Download ABC Electronics and SplatterMatter Paintguns, Inc.
Paintguns, Inc. cases from WebCT. Due: 11:59 PM 1/21/07
Lecture: Basics of Financial Analysis
Case: SplatterMatter Paintguns, Inc.
S03 Finding the Opportunity Discussion Board #2:
Week of Readings: Stevenson: 18-33 (startup strategies); Drucker: 1-36 The DAG Group
1/22/07 (innovation) Closes: 1/19/07 11:59
Lecture: Finding the Opportunity pm
Case: The DAG Group (Stevenson: 143-155)
S04 Finding the Opportunity: Sources of Innovation Written Assignment #2
Week of Readings: Drucker: 37-140 (sources of innovation); download A Opportunities for
1/29/07 Checklist for Opportunity Evaluation from WebCT. Innovation (Individual)
Lecture: Sources of Innovation Due: 11:59 PM 2/4/07
S05 Developing Startup Strategies Discussion Board #3
Week of Readings: Stevenson: 57-62 (road travelled); Drucker: 209-252 Icedelights (Stevenson:
2/6/06 (generic strategies) 78-103)
Lecture: Startup Strategies Closes: 2/9/07 11:59 pm
Case: Icedelights (Stevenson: 78-103)
S06 Evaluating the Opportunity Discussion Board #4:
Week of Readings: Stevenson: 34-42 (valuation); 159-168 (attracting Commercial Fixtures
2/12/07 stakeholders); Bhide, The Questions Every Entrepreneur (Stevenson: 104-122)
Must Answer (HBR 96603) Closes: 2/16/07 11:59
Lecture: Opportunity Evaluation pm
Case: Commercial Fixtures (Stevenson: 104-122) (valuation
analysis)
S07 Group Project: Identification of Business Opportunity Written Assignment #3
Week of Each group will post their Business Opportunity Analysis on the Business Opportunity
2/19/07 Discussion Board for review by the class. (Group)
Due: 11:59 PM 2/25/07
 S08 Business Plans for Entrepreneurial Ventures Discussion Board #5:
Week of Readings: Stevenson: 43-56 (business plans, legal forms); 214-220 Heather Evans
2/26/07 (selling process). Take a look at www.bplans.com and Closes: 3/2/07 11:59 pm
www.startupbiz.com.
Lecture: Developing a Business Plan
Case: Heather Evans (Stevenson: 245-280)
S09 Attracting Stakeholders: Financing the Venture Written Assignment #4
Week of Readings: Stevenson: 169-195; How Venture Capital Works HBR Onset Ventures
3/12/07 98611; see Deal Structure Example posted on WebCT. (Stevenson: 281-310)
Lecture: Financing the Venture (Individual)
Case: Onset Ventures (Stevenson: 281-310) Due: 11:59 PM 3/18/07
S10 SEC & Legal Issues Discussion Board #6:
Week of Readings: Stevenson: 196-214, 465-482 ArthroCare
3/19/07 Closes: 3/23/07 11:59
Lecture: SEC & Legal Issues
Case Discussion: ArthroCare (Stevenson: 543-571) pm

S11 Acquiring an Existing Business Discussion Board #7

Week of Readings: Stevenson: 374-409 Allen Lane (Stevenson:
3/26/07 417-440)
Lecture: Acquiring a Business
Case: Allen Lane (Stevenson: 417-440) Closes: 3/30/07 11:59
pm

S12 Managing the Growing Business Discussion Board #8

Week of Readings: Stevenson: 460-464 Gordon Biersch Brewing
4/2/07 Lecture: Managing the Growing Business Company (Stevenson:
Case: Gordon Biersch Brewing Company (Stevenson: 511-532) 511-532)
Closes: 4/6/07 11:59 pm

S13 Exit Strategies: Harvesting the Venture Discussion Board #9:

Week of Readings: Stevenson: 574-588 Grand Junction
4/9/07 (Stevenson: 629-643)
Lecture: Exit Strategies: Harvesting the Venture
Case Discussion Grand Junction (Stevenson: 629-643)
Closes: 4/13/07 11:59
pm
S14 Entrepreneurial Leadership Written Assignment #
Week of Lecture: Entrepreneurial Leadership 5 New Venture Business
4/16/07 Plans (Group)
Written Assignment # 8: New Venture Business Plans
ƒ Submit electronic copy of Business Plan and Presentation Due: 11:59 PM 4/22/06
Slides in assignment drop box on 4/23/06
ƒ Post copy of Presentation Slides on Discussion Board on
WebCT on 4/23/06
 S15 Presentation of New Venture Business Plans Teleconference: TBA
Week of New Venture Business
4/23/07 Plan Presentations

Written Assignment #6
Peer Evaluation
Due: Day After Web
Conference