Business Law and Corporate Governance

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Questions and Answers

Which of the following best describes the legal framework of a company?

  • It outlines customer service policies and procedures.
  • It defines the company's annual revenue goals.
  • It includes the articles of incorporation and is established by a notary. (correct)
  • It outlines the roles of employees and their duties.

What is the primary purpose of a shareholder agreement?

  • To determine the company's marketing strategies.
  • To protect shareholders' interests and ensure fair treatment. (correct)
  • To establish employee performance evaluations.
  • To outline the company's mission and vision statements.

In the organizational structure mentioned, who directly manages the VPs?

  • The COO
  • The CFO
  • The CEO (correct)
  • The SVPs

What document contains principles that guide the company's behavior and integrity?

<p>The code of ethics (A)</p> Signup and view all the answers

Which of the following statements is true regarding changes to the statute?

<p>They involve a notary for legal modifications. (C)</p> Signup and view all the answers

Why is a new barbershop considered not to be a startup?

<p>It lacks innovative services. (A)</p> Signup and view all the answers

What distinguishes a new social media platform from a traditional barbershop in terms of being a startup?

<p>Social media can grow independently of employee numbers. (C)</p> Signup and view all the answers

According to the definitions provided, which component is essential for a product to be classified as innovation?

<p>A combination of invention and commercialization. (B)</p> Signup and view all the answers

What does the newer definition of innovation emphasize?

<p>Creating impact through problem-solution matching. (B)</p> Signup and view all the answers

What example illustrates the significance of commercialization in innovation?

<p>The Xerox Park mouse commercialized by Apple. (D)</p> Signup and view all the answers

What was the first major innovation in the ice business?

<p>Freezing water to create ice factories. (C)</p> Signup and view all the answers

For how long is a company usually considered in its startup phase?

<p>Five years. (A)</p> Signup and view all the answers

What is a misconception about the relationship between innovation and invention?

<p>Invention alone is sufficient for innovation. (A)</p> Signup and view all the answers

What is the primary focus of a start-up during periods of growth?

<p>Showing financial sustainability (A)</p> Signup and view all the answers

Which of the following best describes the Innovation Readiness Level (IRL)?

<p>An index measuring product development stages (D)</p> Signup and view all the answers

What is the IRL phase where funding is primarily provided by the founders themselves?

<p>IRL 1 and 2 (C)</p> Signup and view all the answers

Which investor class typically supports ideas at IRL 3?

<p>Family, Friends and Fools (FFF) (A)</p> Signup and view all the answers

What is a major hurdle for securing investments at IRL 1 or 2?

<p>Lack of evidence for business potential (A)</p> Signup and view all the answers

As a start-up progresses in the IRL, which of the following stages indicates full-scale operation in the market?

<p>IRL 9 (A)</p> Signup and view all the answers

During the initial development stages, what is a common financial limitation for start-ups?

<p>Limited investment from FFF (B)</p> Signup and view all the answers

Key players in the lifespan of a start-up include everyone EXCEPT?

<p>Competitors (A)</p> Signup and view all the answers

What does the phrase 'connecting the dots' refer to in the context of the stories?

<p>Finding importance in past experiences for future success. (D)</p> Signup and view all the answers

According to the second story, what is essential to achieve great work?

<p>Being passionate about what you do. (C)</p> Signup and view all the answers

Why does the speaker believe it’s impossible to connect the dots looking forward?

<p>Only hindsight reveals the importance of past decisions. (B)</p> Signup and view all the answers

What does the speaker suggest trusting in regarding the future?

<p>Your instincts and feelings. (A)</p> Signup and view all the answers

What concept does the speaker repeatedly mention in relation to work and life satisfaction?

<p>The significance of love and passion. (D)</p> Signup and view all the answers

What does the speaker believe about the relationship between work and life?

<p>Work fills a large part of life and should be meaningful. (D)</p> Signup and view all the answers

What is a primary role of venture builders?

<p>To help large corporations spin-off companies (A)</p> Signup and view all the answers

What distinguishes accelerators from other funding entities?

<p>They can provide direct funding to rapidly advance businesses. (D)</p> Signup and view all the answers

What aspect of communication is emphasized in managing a business?

<p>Adapting communication to different audiences. (D)</p> Signup and view all the answers

What risk do companies face if their communication is ineffective?

<p>Almost certain closure of the business. (A)</p> Signup and view all the answers

What does the senior executive of Microsoft suggest about public domain information?

<p>It may selectively present information to shape perceptions. (C)</p> Signup and view all the answers

Which of the following best describes the communication strategy for companies?

<p>To engage and interact with various stakeholders using tailored communication. (A)</p> Signup and view all the answers

What is a potential challenge when assessing a company only through one communication segment?

<p>It may present an incomplete picture of the company's reality. (B)</p> Signup and view all the answers

How can accelerators benefit from their investment in companies?

<p>Through obtaining shares or monetary returns for their services. (C)</p> Signup and view all the answers

What aspect of speaking is significantly influenced by how you use your voice?

<p>Body language (A), Audience engagement (C)</p> Signup and view all the answers

Which parameter of voice refers to the pitch of the sound?

<p>Intonation (B)</p> Signup and view all the answers

What is the effect of using pauses during a speech?

<p>They allow the audience to digest information. (B)</p> Signup and view all the answers

How can varying the volume of your speech maintain audience attention?

<p>By alternating between low and high volume. (C)</p> Signup and view all the answers

What are filler words, and how do they affect speaking?

<p>They interrupt flow and can distract the audience. (D)</p> Signup and view all the answers

What was highlighted as a key to great presentations according to Matt Abrahams?

<p>Constant variation of voice parameters. (A)</p> Signup and view all the answers

In what way did Caroline Kennedy’s interviews illustrate effective speaking practices?

<p>She frequently used filler words. (D)</p> Signup and view all the answers

Which speaking technique is not mentioned as an important parameter for engaging the audience?

<p>Grammar (B)</p> Signup and view all the answers

Flashcards

Startup

A company in its initial stage of development, typically within the first five years after incorporation.

Innovation

The creation of a novel product or service that brings economic value through commercialization.

Commercialization

A key component of innovation, referring to the process of taking an invention from its initial concept to its practical application in the market.

Innovation as a process

A process where ideas are matched with problems to create solutions that produce positive impact on society.

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Invention

A new product, service, or process that is developed and brought to market.

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Scalability

The ability of a company to grow independently of its number of employees, often driven by technology or network effects.

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Fast Growth

A common characteristic of startups, involving rapid growth and expansion of their operations.

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Local Community

The ability of a company to serve a specific geographic area or market segment.

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Statute (Articles of Association)

A legal document outlining a company's structure and operations, including its name, purpose, and shareholder rights.

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Shareholder Agreement

A document that protects shareholder interests and ensures fair treatment, outlining terms of interaction with the company.

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Code of Ethics

A set of principles guiding a company's behavior and ethical conduct, shared with employees and partners.

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C-Suite

The company's top management team, typically consisting of the CEO, COO, CFO, and other high-level executives.

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Company Structure

The hierarchy of management within a company, showing how responsibilities and authority are distributed.

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Bootstrapping

The phase in which startup founders use their own time and money to fund their venture, as there's not yet enough evidence to attract external investment.

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Innovation Readiness Level (IRL)

A scale to evaluate the maturity of a product or technology, ranging from 1 (idea) to 9 (full market operation).

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FFF Investors (Family, Friends, and Fools)

Investors who provide early funding to startups, typically in the form of small investments, often based on personal relationships with founders.

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Break Even Point

The point where a startup's revenue covers its expenses, marking the achievement of financial sustainability.

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Operating Expenses

Costs incurred in the day-to-day operation of a business, including rent, utilities, salaries, and marketing.

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Capital Expenditures (CAPEX)

Investments made in assets that have longer lifespans, such as buildings, equipment, and technology.

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Money Provider

A key player in the early stages of a startup, who provides the financial resources needed to launch and grow the venture.

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Entities that Support Startup Growth

Organizations or individuals that support a startup's growth by providing mentorship, resources, networking opportunities, or other forms of assistance.

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What is a venture builder?

Venture builders help large corporations create new companies to manage specific business areas or risky projects that are not suitable for internal management.

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What is an accelerator?

Accelerators are programs that provide companies with resources such as funding, mentorship, and networking opportunities to help them grow quickly.

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How do accelerators make money?

Accelerators may receive equity in the companies they support in exchange for their investment or services.

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Why is communication so important for startups?

Effective communication is crucial for startups as they must engage with various stakeholders, including investors, employees, customers, and media, each with their own interests and language.

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How should startups tailor their communication?

Startups need to tailor their communication to their specific target audience, as different groups have varying needs and expectations.

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What should you keep in mind when reading about a company's public information?

Public information about a company may not always reflect the full picture, as it is often curated to create a specific perception.

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What is 'shaping the perception'?

This practice involves presenting information in a way that highlights the company's strengths while minimizing or omitting challenges, struggles, or negative details.

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Is information about a company always false if it is carefully managed?

Even though the information might be selective or incomplete, it does not necessarily mean that it is false.

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Connecting the dots

Everything you learn and do is important and might make a difference in the future by connecting the dots. This means that seemingly unrelated experiences can later connect to create something valuable.

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Love and Loss

Never stop looking for what you truly like and want, both in life and work. Don't settle for something that is less fulfilling even if it seems easier or more convenient.

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Why past experiences are important

The idea that seemingly unrelated experiences can later be connected to make something valuable. This means embracing every opportunity to learn and grow, knowing that it might be useful later.

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Finding work you love

The concept of focusing on what you truly love and want in work. It's about pursuing passion over just getting by, and not settling for less.

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Rule of Ten Minutes

The practice of taking breaks between different parts of a presentation or speech. This helps to keep the audience engaged and prevents information overload.

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Trusting the dots will connect

The idea of trusting that everything will work out in the end, even if it's not clear right now. This involves having faith in yourself and your abilities to achieve your goals.

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Don't settle

The idea of not settling for less than what truly fulfills you, especially in your career. It's about pursuing your passions and goals with enthusiasm and determination.

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Volume

The loudness or softness of your voice.

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Pauses

Pauses in your speech, creating intentional silence. This can be used to emphasize specific points, allow your audience to reflect, and build anticipation.

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Rate

Changing the speed at which you speak.

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Vocal Variety

Using vocal variations such as intonation, volume, pauses, and rate to keep your audience engaged during speaking. This makes your speech more dynamic and memorable.

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Filler words

Filler words like "you know" or "like" that interrupt your speech flow and can detract from your message.

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Body Language

The use of gestures and facial expressions to communicate with your audience.

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Nonverbal Communication

The combination of vocal variety and body language used to enhance communication and engage your audience.

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Study Notes

Preface

  • The notes introduce basic concepts and terminology for startups
  • They are not intended to replace in-depth analysis, but rather a brief introduction
  • Building a successful startup requires a multidisciplinary approach due to its complexity
  • Many issues need to be managed daily

1. Basics

  • A startup is a company at the start of operations, aiming for fast growth
  • The target market must be substantial to allow for rapid growth independent of employee numbers
  • Startups are not established for survival, but for rapid expansion.
  • Examples of startups involve new technology like social media or novel business models.
  • Innovation is the combination of an invention and its implementation/commercialisation
  • Innovation is about solving problems with new solutions.
  • Great examples of innovation include the computer mouse (invented by Xerox and commercialized by Apple) and the ice delivery industry (which allowed the construction of ice factories). Innovation is a key factor in economic growth.

2. Communication

  • Effective communication is essential in startups to interact with various stakeholders with different needs and interests.
  • Public communication may be strategically crafted to shape perceptions.
  • Understanding communication styles (visual, auditory, kinesthetic) is key to effective presentations.
  • The Three Actions for Successful Presentations: inform, inspire, entertain
  • Simplicity and vivid language are crucial for engaging audiences and presenting ideas vividly
  • Use of storytelling in presentations to connect emotionally with the audience
  • Body language and gestures should be intentional and match spoken content

3. Team and Leadership

  • The founding team is the most important resource in a startup.
  • Distinct characteristics exist between teams and groups
  • Team development follows a lifecycle encompassing different phases (forming, storming, norming, performing, termination).
  • Effective communication is crucial for a team to advance from early to later stages of development.
  • Conflicts need to be constructively addressed within the team.
  • Building a high-performing team is a key to success in a startup.
  • Leadership is defined by the ability to inspire and motivate others to achieve common goals.
  • Consistency builds strong leadership over time
  • Empathy, curiosity, and conflict-resolution skills are important leadership qualities

4. Business Model

  • A business model outlines assumptions and how a company makes money
  • A value proposition describes the benefits of the product or service to the customer
  • A value proposition should focus on solving customers' problems.
  • Understanding competitors and their strategies is crucial
  • The three-fit tests (problem-solution fit, product-market fit, business model fit) are essential for evaluating a startup's viability
  • Competitor analysis involves comparing the businesses’ features with its competitors
  • Benchmarking is crucial to evaluating the successful growth of a company

5. PreBP - Business Plan Revisited

  • A business plan outlines strategies, and financial projections
  • A business plan can essentially be an hallucination, since its detailed conjectures about the future cannot be rigorously supported at the startup stages.
  • Pretotyping is recommended as a development strategy for a preliminary business plan
  • Simulation using the business model canvas is important
  • Quantifiable assumptions on sales and market are essential
  • Time to market (time spent for the company to make its first sale) is an important factor to investors.

6. X-Thinking Tools

  • Design thinking is a human-centred approach to innovation developed at Stanford
  • Key stages of design thinking: empathise, define, ideate, prototype, test
  • Visual thinking, computational thinking, and systems thinking are useful tools within design thinking
  • Visual thinking uses images and diagrams to solve problems, often engaging a larger portion of the brain compared to written text
  • Computational thinking defines problems and solutions in a way a computer can understand and implement
  • System thinking is a way of looking at the interconnected elements of a problem to understand how they influence each other.

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