This revised and updated fourth edition discusses the fundamentals of business building, the sources of venture capital available, and the steps involved in obtaining the appropriate financing, including the preparation of a business plan, the choice of a venture capitalist, and negotiations with investors. Also included is advice on how to invest venture capital wisely and how to manage a venture capital portfolio. This replaces 1864488344.
Enterprise&Venture - TEXT PAGES 20/11/01 10:03 PM Page i Enterprise and Venture Capital Enterprise&Venture - TEXT PAGES 20/11/01 10:03 PM Page ii Enterprise&Venture - TEXT PAGES 20/11/01 10:03 PM Page iii Enterprise and Venture Capital A business builder’s and investor’s handbook FOURTH EDITION Christopher C. Golis MA MBA FSIA FAICD Enterprise&Venture - TEXT PAGES 20/11/01 10:03 PM Page iv This edition published in 2002 Copyright © Christopher C. Golis 1989, 1993, 1998, 2002 All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without prior permission in writing from the publisher. The Australian Copyright Act 1968 (the Act) allows a maximum of one chapter or 10 per cent of this book, whichever is the greater, to be photocopied by any educational institution for its educational purposes provided that the educational institution (or body that administers it) has given a remuneration notice to Copyright Agency Limited (CAL) under the Act. Allen & Unwin 83 Alexander Street Crows Nest NSW 2065 Australia Phone: (61 2) 8425 0100 Fax: (61 2) 9906 2218 Email:
[email protected] Web: www.allenandunwin.com National Library of Australia Cataloguing-in-Publication entry: Golis, Christopher C. Enterprise and venture capital: a business builder’s and investor’s handbook. 4th ed. Bibliography. Includes index. ISBN 1 86508 650 9. 1. Venture capital—Australia. 2. Business enterprises— Australia—Finance. 3. Entrepreneurship—Australia. 4. Capitalists and financiers—Australia. I. Title. 338.040994 Typeset in 10.5/12.5 pt Caslon by Midland Typesetters, Maryborough Printed by South Wind Productions, Singapore 10 9 8 7 6 5 4 3 2 1 Enterprise&Venture - TEXT PAGES 20/11/01 10:03 PM Page v FAVOURITE SAYINGS Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat. The general who wins the battle makes many calculations in his temple before the battle is fought. The general who loses makes but few calculations beforehand. Sun Tzu Profits are an opinion, cash is a fact. Anonymous Hope is not a strategy. M. Henos Good judgment comes from experience, and experience comes from bad judgment. Barry LePatner There are two kinds of people, those who do the work and those who take the credit. Try to be in the first group; there is less competition there. Indira Gandhi The power of accurate observation is commonly called cynicism by those who have not got it. George Bernard Shaw Nearly all men can stand adversity, but if you want to test a man’s character, give him power. Abraham Lincoln Enterprise&Venture - TEXT PAGES 20/11/01 10:03 PM Page vi When men speak of the future, the gods laugh. Chinese proverb The first principle is that you must not fool yourself— and you are the easiest person to fool. Richard Feynman A compromise is the art of dividing a cake in such a way that everyone believes he has the biggest piece. Ludwig Erhard We divide business plans into three categories: candy, vitamin