Question 13: CASE STUDY: A NEW VENTURE OF GOOD POTENTIAL WITH AN INCOMPLETE PLAN Pedro Santini has been a computer analyst for five years. In his spare time, he has developed a word processing software program that is more comprehensive and powerful than any on the market. Since he does not have a great deal of money, Pedro believes the first step in producing and marketing this product should be to get the necessary venture capital. The software program has been written and trial-tested by Pedro and a handful of friends to whom he gave the material. Two of these friends are full-time typists who told him that the program is faster and easier to use than anything on the market. Pedro believes that these kinds of testimonials point out the profit potential of the product. However, he still needs to get financial support. One of Pedro’s friends has suggested a meeting with a venture capitalist. ‘These guys have all sorts of money to lend for new ventures’, the friend told Pedro. ‘All you have to do is explain your ideas and sell them to giving you the money. They are always looking to back a profitable idea and yours is certain to be one of the best they have seen in a long time.’ Pedro agrees with his friend but believes he should not discuss the matter with a venture capitalist until he has thought through answers to the various types of questions likely to be asked. In particular, Pedro believes he should be able to provide the venture capitalist with projected sales for the first three years and be able to explain the types of expenses that would be incurred. Once he has done this, Pedro feels he will be ready to talk to the individual. ‘Right now’, he told his friend, ‘it’s just a matter of time. I’d think that within seven to 10 days I’ll be ready to present my ideas and discuss financial needs.’ * Question 11: Suppose, you have just joined a company named "Sky Holiday" and you are listening to your CEO who is speaking before all the newly recruited employees like you. He is talking about all the code of conducts and disciplines to be strictly followed to enhance the profitability and to sustain the long-term growth of the company. Now, as a new intrapreneurial-minded employee, how would you evaluate the strategy of the CEO for future growth and development of the company?

Question 12: Getting the right amount of funds at the right time for a new venture is always challenging. An entrepreneur may face multiple rejections in getting the required funds for his/her venture. What should an entrepreneur do if he/she fails in his/her attempt of receiving funds for the proposed venture? [Marks 10]

13: In addition to financial questions, what other questions is the venture capitalist likely to ask Pedro?