| acquisition financing | Financing to buy another company
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| acquisition | Purchasing all or part of a company
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| affordable loss principle | Prescribes committing in advance to what one is willing to lose rather than investing in calculations about expected returns to the project
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| aftermarket support | Actions of underwriters to help support the price of stock following the public offering
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| assessment of a new entry's attractiveness | Determining whether the entrepreneur believes she or he can make the proposed new entry work
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| assessment of risk | Identifies potential hazards and alternative strategies to meet business plan goals and objectives
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| asset base for loans | Tangible collateral valued at more than the amount of money borrowed
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| assets | Items that are owned or available to be used in the venture operations
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| assets of newness | Positive implications arising from an organization's newness
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| attribute listing | Developing a new idea by looking at the positives and negatives
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| backward integration | A step back (up) in the value-added chain toward the raw materials
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| balance of payments | The trade status between countries
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| bargaining zone | The range of outcomes between the entrepreneur's reservation price and the reservation price of the other party
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| barter | A method of payment using nonmoney items
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| big-dream approach | Developing a new idea by thinking without constraints
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| bird-in-hand principle | Involves negotiating with any and all stakeholders who are willing to make actual commitments to the project; determines the goals of the enterprise
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| blue-sky laws | Laws of each state regulating public sale of stock
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| book value | The indicated worth of the assets of a company
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| brainstorming | A group method for obtaining new ideas and solutions
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| breakeven | Volume of sales where the venture neither makes a profit nor incurs a loss
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| breakthrough innovations | New products with some technological change
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| brokers | People who sell companies
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| business angels | A name for individuals in the informal risk-capital market
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| business ethics | The study of behavior and morals in a business situation
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| business plan | (1)The description of the future direction of the business (2) Written document describing all relevant internal and external elements and strategies for starting a new venture
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| causal process | A process that starts with a desired outcome and focuses on the means to generate that outcome
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| Chapter 07 bankruptcy | Requires the venture to liquidate, either voluntarily or involuntarily
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| Chapter 11 bankruptcy | Provides the opportunity to reorganize and make the venture more solvent
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| Chapter 13 bankruptcy | Voluntarily allows individuals with regular income the opportunity to make extended time payments
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| checklist method | Developing a new idea through a list of related issues
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| cognitive adaptability | Describes the extent to which entrepreneurs are dynamic, flexible, self-regulating, and engaged in the process of generating multiple decision frameworks focused on sensing and processing changes in their environments and then acting on them
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| collective notebook method | Developing a new idea by group members regularly recording ideas
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| comment letter | A letter from the SEC to a company indicating corrections that need to be made in the submitted prospectus
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| comprehension questions | Questions designed to increase entrepreneurs' understanding of the nature of the environment
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| concept stage | Second stage in product development process
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| connection tasks | Tasks designed to stimulate entrepreneurs to think about the current situation in terms of similarities and differences with situations previously faced and solved
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| contract | A legally binding agreement between two parties
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| conventional bank loan | Standard way banks lend money to companies
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| copyright | Right given to prevent others from printing, copying, or publishing any original works of authorship
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| corporate culture | The environment of a particular organization
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| corporation Separate | legal entity that is run by stockholders having limited liability
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| creative problem solving | A method for obtaining new ideas focusing on the parameters
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| deal structure | The form of the transaction when money is obtained by a company
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| demand uncertainty | Considerable difficulty in accurately estimating the potential size of the market, how fast it will grow, and the key dimensions along which it will grow
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| departure points | The activities occurring when the venture is started
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| description of the venture | Provides complete overview of the product(s), service(s), and operations of new venture
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| development financing | Financing to rapidly expand the business
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| direct exporting | Involves the use of independent distributors or the company's own overseas sales office in conducting international business
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| disclosure document | Statement to U.S. Patent and Trademark Office by inventor disclosing intent to patent idea
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| distribution task | Negotiating how the benefits of the relationship will be allocated between the parties
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| diversification strategy | A strategy to grow by selling a new product to a new market
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| diversified activity merger | A conglomerate merger involving the consolidation of two essentially unrelated firms
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| dual process for grief | Involves oscillation between the two grief recovery approaches (loss-orientation and restoration-orientation)
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| due diligence | The process of deal evaluation
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| early-stage financing | One of the first financings obtained by a company
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| earnings approach | Determining the worth of a company by looking at its present and future earnings
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| effectuation process | A process that starts with what one has (who they are, what they know, and whom they know) and selects among possible outcomes
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| emerging industries | Industries that have been newly formed and are growing
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| employee stock option plan (ESOP) | A two- to three-year plan to sell the business to employees
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| entrepreneur as an innovator | An individual developing something unique
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| entrepreneur | Individual who takes risks and starts something new
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| entrepreneurial culture | The environment of an entrepreneurial-oriented firm
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| entrepreneurial intentions | The motivational factors that influence individuals to pursue entrepreneurial outcomes
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| entrepreneurial mind-set | Involves the ability to rapidly sense, act, and mobilize, even under uncertain conditions
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| entrepreneurial process | The process of pursuing a new venture, whether it be new products into existing markets, existing products into new markets, and/or the creation of a new organization
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| entrepreneurial resource | The ability to obtain, and then recombine, resources into a bundle that is valuable, rare, and inimitable
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| entrepreneurial self-efficacy | The conviction that one can successfully execute the entrepreneurial process
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| entrepreneurial strategy | The set of decisions, actions, and reactions that first generate, and then exploit over time, a new entry
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| entrepreneurially fostering environment | An environment that enhances organizational members'perceptions of entrepreneurial action as both feasible and desirable
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| entrepreneurship | (1) Process of creating something new and assuming the risks and rewards (2) is the process of creating something new with value by devoting
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| environmental analysis | Assessment of external uncontrollable variables that may impact the business plan
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| equity participation | Taking an ownership position
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| equity pool | Money raised by venture capitalists to invests
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| error of commission | Negative outcome from acting
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| error of omission | Negative outcome from not acting
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| exporting | The sale and shipping of products manufactured in one country to a customer located in another country
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| factor approach | Using the major aspects of a company to determine its worth
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| factors in valuation | Nonmonetary aspects that affect the fund valuation of a company
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| FIFO | Inventory costing method whereby first items into inventory are first items out
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| final approval | A document showing the final terms of the deal
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| financial plan | Projections of key financial data that determine economic feasibility and necessary financial investment commitment
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| Financial ratios | Control mechanisms to test the financial strength of the new venture
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| focus groups | Groups of individuals providing information in a structured format
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| forced relationships | Developing a new idea by looking at product combinations
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| Form S-1 | Form for registration for most initial public offerings of stock
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| forward integration | A step forward (down) on the value-added chain toward the customers
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| foundation company | A type of company formed from research and development that usually does not go public
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| Franchising | is an arrangement whereby a franchisor gives exclusive rights of local distribution to a franchisee in return for their payment of royalties and conformance to standardized operating procedures.
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| free association | Developing a new idea through a chain of word associations
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| full and fair disclosure | The nature of all material submitted to the SEC for approval
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| gazelles | Very high growth ventures
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| general partner | The overall coordinating party in a partnership agreement
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| general valuation approaches | Methods for determining the worth of a company
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| going public | Selling some part of the company by registering with the SEC
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| Gordon method | Method for developing new ideas when the individuals are unaware of the problem
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| government as an innovator | A government active in commercializing technology
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| grief | A negative emotional response a person feels from the loss of something important
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| high-potential venture | A venture that has high growth potential and therefore receives great investor interest
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| horizontal integration | Occurs at the same level of the value-added chain but simply involves a different, but complementary, valueadded chain
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| horizontal merger | A type of merger combining two firms that produce one or more of the same or closely related products in the same geographic area
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| idea stage | First stage in product development process
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| imitation strategies | Copying the practices of other firms
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| indirect exporting | In international business, involves having a foreign purchaser in the local market or using an export management firm
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| industry analysis | Reviews industry trends and competitive strategies
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| informal risk-capital market | Area of risk capital markets consisting mainly of individuals
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| initial public offering (IPO) | The first public registration and sale of a company's stock
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| integration task | Exploring possible mutual benefits from the relationship so that the "size of the pie" can be increased
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| intellectual property | Any patents, trademarks, copyrights, or trade secrets held by the entrepreneur
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| international entrepreneurship | An entrepreneur doing business across his or her national boundary
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| inventor | An individual who creates something new
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| involuntary bankruptcy | Petition of bankruptcy filed by creditors without consent of entrepreneur
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| joint venture | (1) The joining of two firms in order to form a third company in which the equity is shared (2) Two or more companies forming a new company
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| key success factors | The requirements that any firm must meet in order to successfully compete in a particular industry
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| lead time | The grace period in which the first mover operates in the industry under conditions of limited competition
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| lemonade principle | Prescribes leveraging surprises for benefits rather than trying to avoid them, overcome them, or adapt to them
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| leveraged buyout (LBO) | Purchasing an existing venture by any employee group
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| liabilities of newness | Negative implications arising from an organization's newness
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| liabilities | Money that is owed to creditors
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| licensing | (1) Contractual agreement giving rights to others to use intellectual property in return for a royalty or fee (2) Involves giving a foreign manufacturer the right to use a patent, technology, production process, or product in return for the payment of a royalty
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| lifestyle firm | A small venture that supports the owners and usually does not grow
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| LIFO | Inventory costing method whereby last items into inventory are first items out
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| limited partner | A party in a partnership agreement that usually supplies money and has a few responsibilities
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| liquidation value | Worth of a company if everything was sold today
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| loss-orientation | An approach to grief recovery that involves working through, and processing, some aspect of the loss experience and, as a result of this process, breaking emotional bonds to the object lost
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| majority interest | The purchase of over 50 percent of the equity in a foreign business
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| management contract | A nonequity method of international business in which an entrepreneur contracts his or her management techniques and skills to a (foreign) purchasing company
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| managing underwriter | Lead financial firm in selling stock to the public
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| market development strategy | Strategy to grow by selling the firm's existing products to new groups of customers
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| market extension merger | A type of merger combing two firms that produce the same products but sell them in different geographic markets
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| market knowledge | Possession of information, technology, know-how, and skills that provide insight into a market and its customers
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| market segmentation | Process of dividing a market into definable and measurable groups for purposes of targeting marketing strategy
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| marketing goals and objectives | Statements of level of performance desired by new venture
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| marketing mix | Combination of product, price, promotion, and distribution and other marketing activities needed to meet marketing objectives
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| marketing plan | (1) Describes market conditions and strategy related to how the product(s) and service(s) will be distributed, priced, and promoted (2) Written statement of marketing objectives, strategies, and activities to be followed in business plan
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| marketing strategy and action plan | Specific activities outlined to meet the venture's business plan goals and objectives
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| marketing system | Interacting internal and external factors that affect venture's ability to provide goods and services to meet customer needs
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| merger | Joining two or more companies
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| me-too strategy | Copying products that already exist and attempting to build an advantage through minor variations
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| minority interest | A form of direct foreign investment in which the investing entrepreneur holds a minority ownership position in the foreign venture
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| new entry | Offering a new product to an established or new market, offering an established product to a new market, or creating a new organization
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| nonequity arrangement | A method by which an entrepreneur can enter a market and obtain sales and profits without direct equity investment in the foreign market
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| opportunity identification | The process by which an entrepreneur comes up with the opportunity for a new venture
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| opportunity parameters | Barriers to new product creation and development
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| ordinary innovations | New products with little technological change
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| organizational plan | Describes form of ownership and lines of authority and responsibility of members of new venture
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| owner equity | The amount owners have invested and/or retained from the venture operations
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| parameter analysis | Developing a new idea by focusing on parameter identification and creative synthesis
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| participative style of management | The manager involves others in the decision-making process
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| patchwork quilt principle | Means-driven action that emphasizes the creation of something new with existing means rather than discovering new ways to achieve given goals
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| patent | Grants holder protection from others making, using, or selling similar idea
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| penetration strategy | A strategy to grow by encouraging existing customers to buy more of the firm's current products
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| perceived desirability | The degree to which an individual has a favorable or unfavorable evaluation of the potential entrepreneurial outcomes
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| pilot-in-the-plane principle | Urges relying on and working with people as the prime driver of opportunity and not limiting entrepreneurial efforts to exploiting factors external to the individual
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| political risk analysis | Prior to entering into business in another country, an assessment of that country's political policies and its stability
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| preliminary screening | Initial evaluation of a deal
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| present value of future cash flow | Valuing a company based on its future sales and profits
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| pricing amendment | Additional information on price and distribution submitted to the SEC to develop the final prospectus
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| principle of analysis | Understanding how time is currently being allocated, and where it is being inefficiently invested
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| principle of desire | A recognition of the need to change personal attitudes and habits regarding the allocation of time
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| principle of effectiveness | A focus on the most important issues
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| principle of prioritized planning | Categorization of tasks by their degree of importance and then the allocation of time to tasks based on this categorization
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| principle of reanalysis | Periodic review of one's time management process
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| principle of teamwork | Acknowledgment that only a small amount of time is actually under one's control and that most of one's time is taken up by others
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| private offering | A formalized method for obtaining funds from private investors
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| private venture-capital firms | A type of venture-capital firm having general and limited partners
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| pro forma balance sheet | Summarizes the projected assets, liabilities, and net worth of the new venture assets Items that are owned or available to be used in the venture operations
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| pro forma cash flow | Projected cash available calculated from projected cash accumulations minus projected cash disbursements
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| pro forma income | Projected net profit calculated from projected revenue minus projected costs and expenses
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| pro forma sources and applications of funds | Summarizes all the projected sources of funds available to the venture and how these funds will be disbursed
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| problem inventory analysis | A method for obtaining new ideas and solutions by focusing on problems
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| product development stage | Third stage in product development process
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| product development strategy | A strategy to grow by developing and selling new products to people who are already purchasing the firm's existing products
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| product extention merger | A type of merger in which acquiring and acquired companies have related production and/or distribution activities but do not have products that compete directly with each other
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| product life cycle | The stages each product goes through from introduction to decline
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| product planning and development process | The stages in developing a new product
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| product safety and liability | Responsibility of a company to meet any legal specifications regarding a new product covered by the Consumer Product Safety Act
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| production plan | Details how the product(s) will be manufactured
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| professional-support network | Individuals who help the entrepreneur in business activities
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| prospectus | Document for distribution to prospective buyers of a public offering
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| public-equity market | One of the risk-capital markets consisting of publicly owned stocks of companies
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| quiet period | 90-day period in going public when no new company information can be released
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| red herring | Preliminary prospectus of a potential public offering
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| referral sources | Ways individual investors find out about potential deals
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| reflection tasks | Tasks designed to stimulate entrepreneurs to think about their understanding and feelings as they progress through the entrepreneurial process
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| registration statement | Materials submitted to the SEC for approval to sell stock to the public
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| Regulation D | Laws governing a private offering
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| replacement value | The cost of replacing all assets of a company
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| research and development limited partnerships | Money given to a firm for developing a technology that involves a tax shelter
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| reservation price | The price (the bundle of resources from the agreement) at which the entrepreneur is indifferent about whether to accept the agreement or choose the alternative
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| resources | The inputs into the production process
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| restoration-orientation | An approach to grief recovery based on both avoidance and a proactiveness toward secondary sources of stress arising from a major loss
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| reverse brainstorming | A group method for obtaining new ideas focusing on the negative
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| risk | The probability of, and magnitude of, downside loss
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| risk-capital markets | Markets providing debt and equity to nonsecure financing situations
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| role models | Individuals influencing an entrepreneur's career choice and style
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| S corporation | Special type of corporation where profits are distributed to stockholders and taxed as personal income
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| SBIC firms | Small companies with some government money that invest in other companies
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| SBIR grants program | Grants from the U.S. government to small technology-based businesses
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| scope | A choice about which customer groups to serve and how to serve them
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| situation analysis | Describes past and present business achievements of new venture
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| state-sponsored venturecapital fund | A fund containing state government money that invests primarily in companies in the state
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| strategic tasks | Tasks designed to stimulate entrepreneurs to think about which strategies are appropriate for solving the problem (and why) or pursuing the opportunity (and how)
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| switching costs | The costs that must be borne by customers if they are to stop purchasing from the current supplier and begin purchasing from another
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| synergy | In a joint venture, the qualitative impact on the acquiring firm brought about by complementary factors inherent in the firm being acquired
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| target market | Specific group of potential customers toward which venture aims its marketing plan
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| technological innovations | New products with significant technological advancement
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| technological knowledge | Possession of information, technology, know-how, and skills that provide insight into ways to create new knowledge
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| technological uncertainty | Considerable difficulty in accurately assessing whether the technology will perform and whether alternate technologies will emerge and leapfrog over current technologies
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| technology transfer | Commercializing the technology in the laboratories into new products
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| test marketing stage | Final stage before commercialization in product development process
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| third-party arrangements | Paying for goods indirectly through another source
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| time management | The process of improving an individual's productivity through more efficient use of time
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| top management commitment | Managers in an organization strongly supporting corporate entrepreneurship
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| trade barriers | Hindrances to doing international business
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| trade secret | Protection against others revealing or disclosing information that could be damaging to business
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| trademark | A distinguishing word, name, or symbol used to identify a product
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| traditional managers | Managers in a non-entrepreneurial-oriented organization
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| turn-key project | A method of doing international business whereby a foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns it over to local owners
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| uncertainty for customers | Customers may have considerable difficulty in accurately assessing whether the new product or service provides value for them
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| underwriting syndicate | Group of firms involved in selling stock to the public
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| venture-capital market | One of the risk-capital markets consisting of formal firms
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| venture-capital process | The decision procedure of a venture-capital firm
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| vertical merger | A type of merger combining two or more firms in successive stages of production
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| voluntary bankruptcy | Entrepreneur's decision to file for bankruptcy
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| window of opportunity | (1) The period of time when the environment is favorable for entrepreneurs to exploit a particular new entry (2) The time period available for creating the new venture
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| work history | The past work experience of an individual
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