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incremental shareholder value can be created by Venture Development
projects which are unique "internal business startups"
within the framework of an existing company.
In the article below, “Venture Development:
How Internal Business Startups Leverage Corporate Assets,”
Marshall Graham, Chairman
and founder of FOCUS Enterprises, describes how Venture Development
projects combine the operations expertise provided by FOCUS
principals with the firm's investment banking core competency.
Venture Development projects are unique "internal business
startups" within an existing operating company that can
create tremendous incremental shareholder value. For many
years, FOCUS Enterprises has offered Venture Development consulting
services to the firm’s clients. Venture Development
projects combine operations expertise provided by FOCUS principals
with the firm's investment banking core competency.
COMPANIES
OFTEN LACK ENTREPRENEURIAL MANAGEMENT TALENT
FOCUS can conceive, plan, execute and assist with the financing
of these projects until they reach critical mass and either
should be integrated with the mainstream organization or spun
out with separate external resources including next stage
financing.
EXAMPLES
OF HOW COMPANIES BENEFIT FROM VENTURE DEVELOPMENT
Library Systems and Services, Inc. (LSSI),
a federal government contractor that staffs and manages all
operations of the Department of Energy library system, engaged
FOCUS to evaluate the possibility of migrating their outsourced
management business model to the public and academic library
markets.
FOCUS assisted LSSI management with all phases of the strategic
evaluation and advised LSSI on the best way to enter these
new markets. FOCUS principals also advised LSSI management
on entering into a strategic corporate partnership arrangement
with The Follett Corporation to include a working capital
investment in LSSI.
In another example, some years ago, FOCUS was engaged by
SRA Corporation to assist with the development of IsoQuest,
Inc., an internal startup company with the objective of commercializing
a text processing software product that SRA developed. FOCUS
assisted with strategy, business plan development and staffing
and also sourced venture financing for this startup company.
Finally, Cordant, a federal government contractor, was engaged
by the federal court system to collect and disseminate corporate
bankruptcy information. Cordant engaged FOCUS to determine
whether the bankruptcy information that they collected for
the Federal Government could be sold to private enterprise
companies.
FOCUS principals evaluated all potential markets for this
information and ultimately advised Cordant that setting up
an internal organization to accommodate commercial sales of
this information was not viable.
THE VENTURE
DEVELOPMENT PROCESS
BEGINS WITH EVALUATION
The FOCUS Venture Development process begins with evaluation
of technologies, new product initiatives and/or service offerings.
Next, company management is advised on the alternatives for
commercializing these potential new ventures.
When necessary, market analysis is conducted, including a
competitive overview, facilitation of a "strategic thinking"
process with management regarding the new venture and, if
appropriate, assistance with the business planning process
for the "internal startup." FOCUS principals also
may assist with organizing the management team for the new
venture and sometimes assist the client company with raising
outside investment capital.
DEEP C-LEVEL EXPERIENCE
COMBINED WITH INVESTMENT BANKING EXPERTISE CREATES A FOUNDATION
FOR SUCCESS
If your company has developed a technology, a product or a
process that your management believes could be the centerpiece
of a new corporate venture, please call our firm today. The
combination of operating experience and the investment banking
expertise of FOCUS principals may be able to assist your company
with evaluating these ideas and ultimately commercializing
these opportunities to enhance the shareholder value of your
company.
Prior to founding FOCUS, Marshall
Graham was a senior manager in both large and small organizations,
including IBM, Xerox and Credit Card Service Corporation.
In 1978, Marshall co-founded Source Telecomputing Corporation
("The Source"), the first on-line information and
communications utility sold to consumers. Two years later,
The Source was sold to the Reader's Digest Association. For
more information, contact Marshall Graham at 202-785-9404
x226 or graham@focusbankers.com.
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