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MGT602 - Entrepreneurship - Lecture Handout 27

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  1. To understand the importance of the management team in launching a new venture.
  2. To understand the advantages and disadvantages of the alternative legal forms of incorporation.
  3. To explain the S Corporation and limited liability company as alternative forms of incorporation.
  4. To learn how to prepare a job analysis, job description, and job specification.
  5. To illustrate how the board of directors or board of advisors can be used to support the management of a new venture.


Potential investors are interested in the management team and its ability and commitment to the new venture. Investors usually demand that the management team not operate the business part- time while employed full time elsewhere. It is also unacceptable for the entrepreneurs to draw a large salary. The entrepreneur should consider the role of the board of directors and/or a board of advisors in supporting the management of the new venture.


There are three basic legal forms and one new form of businesses. The three basic forms are:

  1. Proprietorship.
  2. Partnership.
  3. Corporation

A new form is the limited liability company, which is now possible in most states. The entrepreneur should evaluate the pros and cons of each of the legal forms prior to submitting a business plan. He should determine the priority of several factors discussed below. It is also necessary to consider intangibles such as image to suppliers, existing clients, and prospective customers.

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MGT602 - Entrepreneurship - Lecture Handout 09

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  1. To identify some key entrepreneurial feelings and motivations.
  2. To identify key elements in an entrepreneur’s background.
  3. To discuss the importance of role models and support systems.
  4. To identify the similarities and differences between male and female entrepreneurs.
  5. To explain the differences between inventors and entrepreneurs.



Education appears important in the upbringing of the entrepreneur, in the level of education obtained and in playing a major role in coping with problems. Although formal education is not necessary for starting a new business, it does provide a good background. In education, female entrepreneurs previously experienced some disadvantage, with few having degrees in engineering, science, or math. The ability to deal with people and communicate clearly in written and spoken work is also important.

Personal Values

Studies have failed to indicate that entrepreneurs can be differentiated on personal valued from managers, unsuccessful entrepreneurs, or the general public. Leadership, support, aggression, benevolence, conformity, creativity, veracity, and resource seeking may also be important. A successful entrepreneur is frequently characterized as a winner; winning may be a prerequisite for his or her actually becoming one.

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