Saturday, July 25, 2009

Advanced entrepreneurship and an MBA

I teach Entrepreneurship and Entrepreneurial Finance as an adjunct instructor in the Rollins College MBA program. As a lawyer for 34 years working with entrepreneurial companies, primarily high tech companies, I've been part of the growing pains that these companies go through. I also have an MBA and worked as the CFO for a startup company that went public (before I decided to go to law school).

Having an MBA is incredibly useful when your company has the resources to do things that MBAs are skilled at doing. That is, researching the market, developing a strategy, finding and arranging for the infusion of new capital, managing the supply chain, developing sales channels, etc. all require a minimum amount of resources just to consider these matters. Startups are always severly resource limited and have to be very clever at using other people's money to get to a sustaining level of business.

I've seen only a handful of startups where one of the founders had an MBA. But, the skills taught in an MBA program were not really applicable to the startup. Not until the company reached a level of revenues of $5-10 million did the company have the resources to even consider doing the things a person with an MBA could suggest.

So, my observation is that a person with an MBA usually has a greater impact on an entrepreneruial company at the stage where the company has reached a level where it can obtain resources such as investor capital or bank borrowings to use to grow the business. Companies at this level have the potential of making a much greater impact on the local community than startups because they can grow rapidly with the use of resources that are not generally available to startups.

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