2005-06 Dare to Dream Grants

1. 2005-06Dare to Dream Grants Sponsored by the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies

2. Agenda • What is the Dare to Dream program • Two types of grants • Applications and review • Moving beyond Dare to Dream

3. Dare to Dream is a program to encourage students in the thoughtful development of their own businesses and business concepts. The team leader must be an RSB current student. Team members can be from outside RSB and/or the University.

4. OpportunityIdentification Ideate Business Assess Business Integration Business Launch & Acquisition Liquidity Event DevelopBusiness GrowBusiness Manage Turn-around Dare to Dream Grant Program Assessment Integration Development Stages & ZLI Programs ZLI Business Challenge &Intercollegiate Competitions Entrepreneurial MAPdomestic & international opportunities Williamson – Early Stage Commercialization Frankel Fellows Program Wolverine Venture Fund Marcel Gani Internship Program (including JumpStart!) Michigan GrowthCapital Symposium Entrepalooza: overview of entrepreneurship across multiple industries, business stages and entrepreneurial concepts Emerging Industries: in-depth exploration of an industry and family of technologies emphasizing entrepreneurial opportunity

5. Dare to Dream Grants are not • A competition • An endorsement of the business or business concept • An endorsement of the management team • For academic credit

6. Dare to Dream Grants • Encourage the creation, launch and development of new student-led businesses • Develop student entrepreneurial skills

7. Dare to Dream Grants are Awarded to businesses and concepts for which the student-led team has convinced ZLI of the • Innovation • Value • Motivation Encouragement for students to • Take risks • Explore opportunities • Expend effort and dedicate time

8. Dare to Dream Applications • Assessment Grants force answers the questions • Is there enough “there” there to justify assembling a full plan? • Are market need, proposed solution and target market in line? • Integration Grants drive the team to • Dive deeper into the issues of formation and launch • Assemble full business plan to address all concerns of launching and growing a business

9. Dare to Dream Grants and Business Stage Activities Opportunity Identification Ideate Business Assess Business Integration Business Launch • Do you have a solution that delivers benefits and solves market pain? • Are you in the process of deciding what your business model will be? • Have you completed a Porter’s 5 Forces analysis? • Is your in-depth primary market research complete? • Are all key managers and board members “lined up” or in place? • Can you articulate the innovation in your idea? • Have you identified the initial market? • Do you know the industry’s critical success factors? • Have you recruited and partnered with a beta customer? • Is the “whole” or “complete” product package finalized? • Have you articulated the value proposition? • Are initial financial and cost estimates complete? • Have you identified and validated operational milestones? • Has your business plan been distributed for funding? • Do you understand how this company fits within the industry? • Have you conducted your target market research? • Have you validated assumptions and have a dynamic financial model? • Have you developed a full investor pitch? • Do you have a preferred market entry strategy? • Has the company begun generating revenues? If “no” to either of these two questions, you are too early for Dare to Dream. Consider applying next term. If you can answer “yes” to the two “opportunity identification” questions, but not to the all of the questions in these two columns, apply for the Assessment Grant. If you can answer “yes” to the questions in the first three columns but not all in “integration” and “business launch”, apply for the IntegrationGrant. If “yes” to all the questions on this page, you are most likely beyond Dare to Dream, contact the Zell Lurie Institute BEFORE applying.

10. Dare to Dream Applications • Student-led teams convince ZLI of • Innovation • Value • Motivation • Application and review criteria • Different requirements and evaluation for Assessment and Integration

11. Applications Linked to the Zell Lurie Institute web site www.zli.bus.umich.edu • Three sections: • Team information • Business concept information • Application and award agreement • KNOW WHAT YOU ARE APPLYING FOR!!!

12. Assessment Application • What is innovative about the product or service you are proposing? Is this a new or better product, service, technology, business model, or process? • Describe the benefits of your product or service for your target market segment. • What is the target market for this product or service? • What are the initial indications of market potential in terms of customers, units or revenues?

13. Assessment Application • What is the nature of the competition in your market? If you are entering a new market, how are customers’ needs being met now? • Describe the entrepreneurial aspirations of the management team. • Describe the information needed and steps to launch your business.

14. Integration Application • What is innovative about the product or service you are proposing? What features make this superior? • Describe the benefits of your product or service for your target market segment. What will your solution displace? • What is the market potential for this product or service in the initial target market segment? What other attractiveness is there for that segment? • What is the nature of the competition in your chosen market? What is the anticipated response from current competitors and potential new entrants?

15. Integration Application • What are the industry conditions that allow this company to be competitive in the market? • Describe the entrepreneurial aspirations of the management team. • Identify the critical success factors for this business. How are they addressed by the team? • Provide a one-page financial summary for 2 years.

16. Critical Success Factors • CSFs are particular to the business model in a specific industry. • In any concern, there are dozens of variables that will determine the success or failure of a business. • CSFs are those 2 – 5 variables which “trump” all the others. • Example: general retailing • CSF: “location, location, location” • McDonald’s, Starbucks • Example: mass market retailing • CSF: logistics and inventory management • Target, Wal-mart • Example: high-end retailing • CSF: customer relationships • Neiman-Marcus, Mercedes

17. Critical Success Factors • Which decisions or activities, done right, will (almost) always deliver disproportionately positive effects on performance? • Corollary – Fatal flaw • What few decisions or activities, if wrong, will (almost) always have severely negative effects on company performance? • How will you build your team and/or business model to take full advantage of CSFs?

18. Example of 2-year financials

19. Evaluation of Applications

20. Moving Beyond Dare to Dream Encouragement for students to • Take risks such as • Executing primary research with customers and technologists • Undertaking incorporation process • Recruiting and building a team • Explore opportunities • Is your solution the right solution for market need? • Is there a better application or market for your solution • Expend effort and dedicate time • Fit these activities into your already busy Michigan schedule

21. Moving Beyond Dare to Dream Tie in to other entrepreneurial activities • ES electives • ES615: New Venture Creation • ES###: Innovation (new for Winter ’06) • Michigan Business Challenge • Iterative, multi-cycle tournament for student-led start-ups. Over $30,000 in prize money • Marcel Gani JumpStart! internships • Opportunities for student CEOs to intern at their OWN start-ups

22. 9/16 Information session 9/30 Fall ’05 applications due 10/14 Fall ’05 awardees announced Next application deadline: Complete Fall ’05 Assessment deliverables become part of application for Winter ’06 Integration 1/27 2/17 Winter ’06 awardees announced 4/14 Fall ’05 deliverables due 9/7 Winter ‘06 deliverables due Process and Timeline

23. Questions?Dare to Dream Grants Paul Kirsch pskirsch@umich.edu

24. Dare to Dream Grants and Business Stage Activities Opportunity Identification Ideate Business Assess Business Integration Business Launch • Do you have a solution that delivers benefits and solves market pain? • Are you in the process of deciding what your business model will be? • Have you completed a Porter’s 5 Forces analysis? • Is your in-depth primary market research complete? • Are all key managers and board members “lined up” or in place? • Can you articulate the innovation in your idea? • Have you identified the initial market? • Do you know the industry’s critical success factors? • Have you recruited and partnered with a beta customer? • Is the “whole” or “complete” product package finalized? • Have you articulated the value proposition? • Are initial financial and cost estimates complete? • Have you identified and validated operational milestones? • Has your business plan been distributed for funding? • Do you understand how this company fits within the industry? • Have you conducted your target market research? • Have you validated assumptions and have a dynamic financial model? • Have you developed a full investor pitch? • Do you have a preferred market entry strategy? • Has the company begun generating revenues? If “no” to either of these two questions, you are too early for Dare to Dream. Consider applying next term. If you can answer “yes” to the two “opportunity identification” questions, but not to the all of the questions in these two columns, apply for the Assessment Grant. If you can answer “yes” to the questions in the first three columns but not all in “integration” and “business launch”, apply for the IntegrationGrant. If “yes” to all the questions on this page, you are most likely beyond Dare to Dream, contact the Zell Lurie Institute BEFORE applying.