FME Venture Project Handbook PDF

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Foundations of Management & Entrepreneurship VENTURE PROJECT HANDBOOK

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Table of Contents Click each section hyperlink to be brought to that section 1. Welcome to FME! (page 3) 2. Babson College Honor Code (page 4) 3. The FME Venture Project Process: Explore, Pursue, Launch (page 5) 4. Grading your Venture Project (page 7) 5. The Rocket Pitch Presentation: Explore Phase Presentation Requirements (page 9) 6. Feasibility Presentation: Pursue Phase Presentation Requirements (page 12) 7. Launch Plan & Request for Funding: Pursue Phase Report Requirements (page 15) - Venture Information Form - Loan Approval Form - On-Campus Contacts for FME Ventures - Customs Information for FME Ventures 8. FME Venture Policy on Ethics and Conflicts of Interest (page 20) - Disclosure of Substantial Interests Form 9. FME Venture Operating Guidelines (page 21) - FME Event Planning Guide - FME Event Approval Checklist 10. FME Venture Required Reports and Control Mechanisms (page 22) - FME Bank Deposit Slip - Monthly Sales Tax Report Instructions 11. FME Venture Policies and Regulations (page 24) 12. FME Venture Marketing and Advertising Guidelines (page 26) 13. FME Interim Presentation: State of the Venture (page 27) 14. Closing of the Venture (page 29) - FME Close of Business Checklist - FME Financial Reconciliation Form 15. Continuing on with your FME Venture (page 30) 16. Final Venture Presentation: Report to the Babson Community (page 31) 17. Appendix of Forms (page 34)

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Welcome! You are about to embark on an exciting journey: Foundations of Management & Entrepreneurship (FME) is designed to expose you to the world of entrepreneurship and management. In this course, you’ll become familiar with entrepreneurial thought and action, the creation of economic, environmental and social value through venture activity, and with entrepreneurial leadership, build your understanding of how to work with and through others to explore, pursue and launch a new opportunity. The venture project is designed to provide for you an entrepreneurial experience that closely imitates the real thing. In the process, you’ll gain insights into entrepreneurship, marketing, teamwork and entrepreneurial leadership that will provide a strong foundation for the rest of your career at Babson and beyond. Our goals are straightforward: We plan to expose you to the venture world from a variety of perspectives. We want you to appreciate and understand the importance of responsibility to the community and to society from a venture perspective. We will give you the opportunity to apply what you learn in the classroom to actual venture practice. In addition, we want to stimulate your desire to learn, enhancing your prospects for a successful and exciting career. This handbook was written to serve as a reference guide for the venture project, describing it in more detail and suggesting several issues you should consider throughout the year. The faculty and staff of Academic Services are happy to answer any questions you might have. You should get in the habit of going to them, getting to know them, and talking with them about what you’re learning and what you hope to learn. This project will be a journey of self-discovery. You’ll be asked to reflect individually and in your teams about what you’re learning. You’ll experience the challenges of pursuing an opportunity from conception to execution. Along the way, you’ll be asked to move outside your own “comfort zone” on a regular basis. In the process, you’ll grow as an individual. You’ll also learn about yourself, your skills, your areas of growth and begin to explore the type of work you might feel inspired to pursue. We want to stress that while you will be pursuing a new opportunity, our goal here is not that of profitability. Yes, a venture needs to make a profit, ultimately. However, you came to Babson to learn. As such, you’ll be graded on what you have learned, not how much money your opportunity makes. Preparing yourself for a career in any aspect of venture also requires the continual attention to the building of character, your own and that of others. As such, you’ll also be graded on your professionalism, your leadership and your effectiveness as a team member and member of the larger Babson community. Most importantly, we want you to have fun while you learn. If you see the value in doing so, you will have learned a great deal by the end of the academic year. Your efforts combined with the efforts of your classmates will bring success to the project. Standing by as coaches, facilitators and experts, we, the faculty, are prepared to help and guide you through this journey. But, we won’t do the work for you; only you can do that. Welcome aboard the FME Venture Project! Enjoy your trip! The FME Faculty

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Babson College Honor Code The Honor Code is comprehensive and its philosophies apply to all of your behavior and decision making at the College, both inside and outside the classroom. As an active and engaged member of Babson’s Community of Honor, you are expected to act with integrity. Your actions, behaviors, and decision making should demonstrate reflection and support for the five guiding principles set forth in the Code’s Five Pillars of Integrity: honesty, respect, trust, fairness, and ownership. At Babson: Honesty Honesty is truthfulness in all that we do and say, including clear attribution for others’ thoughts and ideas. Respect Respect is showing sincere consideration and appreciation for individuals and the differences among them. Trust Trust is the ability to believe in the integrity and reliability of others. Fairness Fairness is actively ensuring that everyone has access to the same opportunities and community resources. Ownership Ownership is taking pride in and responsibility for one’s actions and authorship, and having the courage to compel others to do the same. How will you know if your behaviors, actions, and decision making support the Code? The Code challenges you to take leadership and responsibility for your own self-evaluation by asking you to reflect on two central questions before choosing to act: 1. Am I being true to my work, my word, and my friend? 2. Do my actions demonstrate my commitment to Babson’s Community of Honor and the Code’s Five Pillars of Integrity? Honesty: Am I being true to myself and others? Respect: Do my actions reflect my appreciation and consideration for differences among members of this community? Trust: Do my actions promote an atmosphere of openness and mutual understanding? Fairness: Do my actions maintain a fair and level playing field? Ownership: Do I take responsibility for my actions and the actions of others?

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The FME Venture Project Process Entrepreneurial activity tends to follow a process though it is often not a linear process as we’ll discuss in class. We describe three “formal” phases for the FME Venture Project here, with the knowledge that in the real world, a venture may cycle through these phases several times. The FME Venture Project has been designed to take you and your team through those steps. In this section of the Handbook, we’ll present a brief overview, but rest assured that we’ll cover these steps in more detail in class. You should always make sure that you understand “where you are now” in the process and refer to this Handbook to help you and your team understand the requirements for moving through the process. There are three steps in the FME Venture Project life. They are: Explore •

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In this phase, you will be placed into a 10-11 person team with approximately nine other individuals from your section. Explore lasts approximately five weeks. During this phase, you’ll learn about, and be asked to engage in, a process of idea generation and refinement. You and your team will, over the course of those five weeks, explore several venture ideas that you’ll then take to the Rocket Pitch. On Rocket Pitch Day your team will present two or three rocket pitches to the class. The instructions for preparing your rocket pitch can be found in this Handbook, and will be discussed in class. The class will provide feedback on each pitch. The venture idea can’t go through to the next step if it does not have the support of the class. Your Faculty and FME Mentors will then discuss your rocket pitches and the class feedback and together, determine which ideas, if any, should go to the next step. The decisions coming out of Rocket Pitch Day will be either: (1) good to go to the next step, (2) no go, or, (3) the idea has merit and we’ll ask you to take some feedback into consideration and pitch the idea again in the following week. Each team will hopefully have at least one idea that makes it through to the nextstep, which is…

Pursue •

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In Pursue, you and your teams will study your opportunity idea. This step lasts approximately five weeks. You’ll use the tools of marketing research to help you understand the opportunity, its market, and its potential for creating economic and social value. You’ll do an in-depth study of your opportunity idea’s potential to positively or negatively impact others and the environment. You’ll work toward a detailed forecast for your potential revenue and profit, and the start-up funding that would be necessary were you to launch the opportunity. This leads to a Feasibility presentation, which is described in detail in this Handbook. Again, the outcome of this presentation will determine whether or not your proposed venture can move to the next step. Your classmates, FME Mentors and Faculty must all agree that the proposed venture is in fact feasible. The proposed venture can’t go through without the support of the class, and FME Mentors and Faculty do have the

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right to veto movement to the next step, though this is likely to be quite rare. Launch (first and second semester) End of First Semester Launch Phase • In the Launch phase, you’ve got a few more tasks to do before you’re ready to start your venture. • You must first create a December break project plan. You’ll define the key tasks that need to be done over break, who will do this work, and how it will be coordinated. You’ll present your Project Plan in class. You’ll receive guidance on how to prepare for this activity in the classroom. • You’ll then need to prepare your Request for Funding proposal, for presentation to the Faculty. The guidelines for this can be found in this Handbook. This proposal, which will be presented as a written report, pulls together material from your feasibility assessment and your project plan. This report serves as an explanation for the loan that you are requesting from the College to launch your venture. • These activities will be completed by the end of the first semester. Second Semester Launch Phase • Over the course of the second semester, you’ll be responsible for running your venture. Guidelines for the conduct of your venture will be presented in class, though you’ll also find some important policies and guides in the Appendix to this document. • Finally, near the end of the second semester, you’ll close down your venture, in accordance with the policies of Babson College. Guidelines for closing down your venture can be found in this Handbook. • Launch closes with a Presentation to the Community. This provides your team the opportunity to reflect on their experiences and lessons learned during the course of the year. This is a major activity for your team and the details for preparing for the Report to the Community can be found in this Handbook. At your Report to the Community, you will hopefully be joined by members of the Babson community, invited friends, family, and advisors to hear about your experience.

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Grading the FME Venture Project Statements in bold represent desirable FME venture project characteristics. In general, the more of these characteristics your venture demonstrates, the higher your venture project grade. Note that some of the characteristics are more applicable to second semester when your venture is running. Regardless, this will give you an idea of the kinds of ideas and plans that we hope will emerge during the Explore and Pursue phases and the kinds of venture operations that we hope to see during the Launch phase. Bulleted points represent examples of how a team might demonstrate desirable venture project characteristics. Not all examples will be relevant to all ventures, and faculty may consider additional factors not listed here. The venture project grade may also be affected by peer evaluations and FME Mentor input. The final decision regarding the FME venture project grade is made by the FME faculty. Desirable Venture Project Characteristics The venture demonstrates creativity in its choice and definition of the opportunity. Examples include: • The chosen opportunity challenges the status quo. • The chosen opportunity is defined in a novel way. • The definition of the opportunity draws on concepts and solutions from diverse perspectives and disciplines. • The chosen opportunity addresses problems often taken for granted. • The chosen opportunity addresses a major problem in a novel way. The venture demonstrates an on-going ability to utilize entrepreneurial thought and action, including both creative and predictive logics. Examples include: • The team seeks out opportunities to interact with potential customers and other stakeholders and to learn from those interactions. • The team seeks out opportunities for experimentation and further refinement of their product or service. • The team reflects as individuals and as a team on what they learn about their product/ service through interactions with customers/stakeholders and through experimentation. • The team demonstrates the ability to assess and manage the risks associated with continuous learning about their product/service and its use. • The project has one or more clearly defined target market(s). • The team makes effective use of marketing research, both qualitative and quantitative. • The team seeks information from existing sources regarding markets, trends, and competitors. • The team effectively assesses its existing and needed resources (financial and nonfinancial) as a means of exploring and pursuing venture ideas and launching the venture.

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The venture demonstrates awareness of – and in practice takes into account – the social, environmental and economic context. Examples include: • Team members observe the Babson Honor Code. • Team members conduct themselves ethically, as a venture team and as individuals. • The team is aware of and takes into consideration the needs and rights of all stakeholders to their venture. • The team conducts an on-going and transparent assessment of the social and environmental impact of their product/service and their supply chains. • The team carefully and transparently assesses the quality of its product/service in relation to their customers’ needs and their product or service promotions. • The team seeks out opportunities to create social and environmental shared value through their venture. • The team collects information about, and makes decisions that take into account, the social and environmental consequences and sustainability of their actions. • The team demonstrates intentionality in decision making when balancing environment, social and economic outcomes. The venture supports the personal development and satisfaction of its members. Examples include: • Team members demonstrate mutual respect in their work together. • There is effective and regular communications between team members. • Work is distributed in a fashion that supports the growth of team members. • Team members provide mutual coaching to support their learning. • The team leverages the diversity of its membership. • Conflicts within the team are positively resolved in a timely fashion. • Individual team members hold themselves and one another accountable for their work and behavior. The venture demonstrates the effective application of organizational behavior concepts that lead to positive venture and personal outcomes. Examples include: • The team has clearly defined its mission and values. • Goals are clearly articulated and shared on an ongoing basis. • The team establishes and supports appropriate leadership structures. • The team holds regular and effective meetings to facilitate a shared understanding of the required tasks and opportunities facing the team (including leadership meetings, departmental/functional meetings and all-team meetings). • The team creates and uses an effective performance management system. • The team creates and runs a venture that effectively engages all members. • The team manages conflict in a professional and constructive manner. • The team keeps faculty, mentors, and other relevant stakeholders informed regarding relevant developments in the venture, through both formal reporting (e.g. Pulse Reports and other deliverables) and informal communication. • The team seeks out external coaching, guidance, and feedback where appropriate from faculty, mentors, staff, peers, and/or other sources.

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The venture team effectively projects, collects and reports the financial and economic aspects of its operations. Examples include: • The team conducts an appropriate process to evaluate its suppliers and/or other venture partners. • The team creates realistic pro forma statements regarding possible venture opportunities. • Financial transactions are recorded in an accurate, comprehensive, and timely manner. • The team provides accurate and timely reporting of its financial status to all relevant stakeholders. • The team effectively manages the final audit and close of the venture at year-end. • The profit derived from venture operations is consistent with the mission and goals.

The Explore Phase Presentation – The Rocket Pitch After your explore team1 has engaged in smart actions to explore a few areas of interest and settled on a few opportunities to pursue, you will need to rocket pitch the idea to the FME class. A Rocket Pitch is designed to help you focus your opportunity and teach you how to quickly and succinctly deliver the critical differentiating elements of the venture idea. Each opportunity team has 3 minutes and 3 PowerPoint slides to pitch the critical elements and benefits of the venture idea. Each opportunity team can pitch 2-3 ideas (depending on the discretion of your faculty). For each rocket pitch, the presenting team should prepare 3 power point slides for this presentation, which must be uploaded through Blackboard as indicated in the syllabus. Please follow your faculty instructions as to deadlines and specifics for uploading and giving these presentations. Here is a guide, as well as the Rocket Pitch grading rubric (on page 11), to help you prepare your Rocket Pitch: Slide 1: The Opportunity This slide should focus on describing the opportunity that you are exploring, why it is interesting, what is the solution you are proposing, and what is the dramatic difference of this solution? • What is the problem/opportunity you’ve identified? • Why is this an interesting problem/opportunity to consider? • What is your solution to this problem or the source of opportunity? • What needs are being satisfied by this solution? • What is the overt benefit, dramatic difference of your solution? Slide 2: The Market This slide should discuss general estimates of who the target market is, how big it is, and who your competition is. 1

Team nomenclature. Your explore team is the 10-11 person team that you were divided into. The opportunity teams are the 2-4 person teams that were created within your explore team based on common interest areas. Each explore team likely includes 3-4 opportunity teams. You will need to decide out of these 2-3 rocket pitches to give.

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Who is your target market? What is your estimate on market size and potential demand? Who is your competition?

Slide 3: The Business Model This slide should include some general, initial ideas you have about implementin...