The Catalyst of American Entrepreneurship:the Dealmaker’s Role in the Establishment ofHigh Performance Entrepreneurial Networks

 

Briefing to the TRE Networks RoundtableDecember 6, 2011

Ted D. Zoller, PhDDirector, UNC Center for Entrepreneurshipand Associate Professor

© Please do not publish or distribute without prior permission.

Networks and Economic Performance of Entrepreneurial Economies

Who’s the Who?

• THE WHO? New Frontiers– Application of Network Theory (Now Being Built)– Methods Understanding Economics Through

Social Capital– Integration of Innovation, Funding and Firms– Understanding Acuitively Role of Social Capital

Structure

Dealmakers Conceptualized

Entrepreneurs

Investors

???????

Aggregate View of Social Capital

Dealmakers Conceptualized

.

Dealmakers

Broker Information

and Resources

Shape Deal Networks

Syndicate and

Interconnect

Structured View of Social Capital

Dealmakers Conceptualized

Dealmakers Conceptualized

Dealmakers Conceptualized

Dealmaker’s Algorithm In Brief

Who’s the Who?

1. Identify All Entrepreneurs and Investors in a Region by:• Discovering Individuals with Board Positions in

Private Companies;• Uncovering Personal Data from Filings of Securitized

Investments• Tracking their employment history and firm

affiliations;

2. “Stacking” the Number of Firm Positions Held to Identify Serial Entrepreneurs and Investors who are central to the network.

3. Socially Map these affiliations to:• Identify the key actors in the network by industry;• Uncover person to person ties in the community;• Characterize the size, social characteristics and

cohesiveness of the community;• Suggest ways to increase performance of the

network.

Conceptual Model

NestedInterlocks:

ActorswithinFirmswithin

Regions

Emerging Dealmakers

Entrepreneur

Investor

SU/SOFirm

Mgmt Team

Board

Brokers

Founder/ManagementInvestor

ExtraRegional (outside Technopole) IntraRegional

(within Technopole)

DEALMAKERS

3+

4+

Serial Dealmakers2+

Regions/Industries Specified

Information Technology Industry Classifications Information Technology (Primary)Telecommunication Services (Primary)

Life Sciences and Biotech Industry ClassificationsHealthcare Equipment and Supplies (Primary)Pharmaceuticals, Biotechnology and Life Sciences

(Primary)Health Care Technology (Primary)

Entrepreneurial Firm Birth Results1984-2009

Entrepreneurial Firm Birth Results1984-2009 (Normalized on 1984 Base Year)

Dealmaker Concurrent Ties: All Technopoles

Concurrent Social Network Ties (Board and Firm Interlocks)

# o

f A

cto

rs in

Netw

ork

(R

eg

ion

al En

trep

ren

eu

rial Econ

om

y)

4(1026) 5(603) 6 (391)

Correlation Matrix

Total Associated Entrepreneurial Networks by Technopole, Sorted by Regional Population Size

Silicon ValleyBoston Phoenix Seattle

Minneapolis Denver Orange Co. San Diego

Portland Salt Lake City AustinRTP

Emerging Dealmaker and Dealmaker Networks by Technopole, Sorted by Regional Population Size

Boston Phoenix Seattle

Minneapolis Denver Orange Co. San Diego

Portland Salt Lake City RTP Austin

Silicon Valley

Austin

Boston Seattle

San Diego

Salt Lake City RTPPortland

Phoenix

Orange Co.Minneapolis Denver

Dealmaker Networks by Technopole, Sorted by Regional Population Size

Silicon Valley

Component Analysis of Total Entrepreneurial Networks by Technopole, Sorted by Regional Population Size

Boston Silicon Valley Phoenix Seattle

Minneapolis Denver Orange Co. San Diego

Portland Salt Lake City RTP Austin

???????

Deep Dive North Carolina’s Dealmaker Network

North Carolina Entrepreneurial EconomyConcentration of Equity Holdings by Sector

Healthcare

Industrials

Energy

Information Tech

Telecom

North CarolinaAggregate Entrepreneurial Network

Healthcare

Industrials

Energy

Information Tech

Telecom

North CarolinaAggregate Entrepreneurial Network

Healthcare

Industrials

Energy

Information Tech

Telecom

North CarolinaDealmaker Entrepreneurial Network

Healthcare

Industrials

Energy

Information Tech

Telecom

Charlotte-RTPDealmaker Bridge N=126

North CarolinaDealmaker Entrepreneurial Network

Healthcare

Industrials

Energy

Information Tech

Telecom

Research Triangle ParkAggregate Entrepreneurial Network

Life Sciences

Industrials

Energy

Information Tech

Telecom

Research Triangle ParkAggregate Entrepreneurial Network

Life Sciences

Industrials

Energy

Information Tech

Telecom

Research Triangle ParkDealmaker Entrepreneurial Network

Life Sciences

Industrials

Energy

Information Tech

Telecom

Dealmaker Career Pathways

Initiator Stage 1 Serial Stage 2Emerging

Dealmaker Stage 3 Dealmaker Stage 4

Inve

stor

Entr

epre

neur

Investment Banking/Asset Management (IB)

Financial/Securities Analyst (FA)

Director, Investment/Merchant Banking (DB)

Principal, Investment Partnership (RI)

Partner, Asset Manager/PE (PE) Chairman, Asset Manager/PE (CP)

Partner/VP, Investment Bank/Partnership (PI)

Managing Director, Investment/Merchant Bank

(MB)

Principal/Associate VC Firm (VC)

Jr. Partner, VC Firm (JV) Partner, VC Firm (PV) Managing General Partner, VC Firm (GV)

Partner at Venture Accelerator and Fund (PA)

VC or Holding Company Advisor or Entrepreneur-in-

Residence (AD)

CEO and Chairman of Private Company (CH)

C-Level Private or Venture-backed (CV)

President/CEO/Chair High-Growth Private (UR)

HNW/Angel Investor and Advisor (AN)

Manager, Large Public Corporation (CD)

Sr./VP High Growth Public Company (HU)

C-Level High Growth Public (CU)

CEO/Chairman High Growth Public Company (EU)

Partner and Advisor, VC Firm (PC)

Sr./VP High Growth Private Company (HV)

Partner/Principal, Services Company (SV) C-Level Services (CS)Line Role High-Growth

Company (HD)

Consulting or Services Company (SD)

Early-stage Founder (NC)

Serial Founder (SF) CEO/Venture-backed Company (EO)

CEO and Advisor Venture-backed Private (VA)

University Faculty or Administrator (UF)

University Dean/Dept Head (UD)

Initiator Stage 1 Serial Stage 2Emerging

Dealmaker Stage 3 Dealmaker Stage 4

Inve

stor

Entr

epre

neur

Investment Banking/Asset Management (IB)

Financial/Securities Analyst (FA)

Director, Investment/Merchant Banking (DB)

Principal, Investment Partnership (RI)

Partner, Asset Manager/PE (PE)PROFILE 4Chairman

Asset Manager/PE (CP)

Partner/VP, Investment Bank/Partnership (PI)

PROFILE 4Managing Director,

Investment/Merchant Bank (MB)

Principal/Associate VC Firm (VC)

Jr. Partner, VC Firm (JV) Partner, VC Firm (PV)PROFILE 3

Managing General PartnerVC Firm (GV)

Partner at Venture Accelerator and Fund (PA)

VC or Holding Company Advisor or Entrepreneur-in-

Residence (AD)

PROFILE 1

CEO and Chairman of Private Company (CH)

C-Level Private or Venture-backed (CV)

President/CEO/Chair High-Growth Private (UR)

PROFILE 6High Profile and Net WorthAngel Investor and Advisor

(AN)

Manager, Large Public Corporation (CD)

Sr./VP High Growth Public Company (HU)

C-Level High Growth Public (CU)

CEO/Chairman High Growth Public Company (EU)

PROFILE 2Partner and Advisor

VC Firm (PC)

Sr./VP High Growth Private Company (HV)

Partner/Principal, Services Company (SV) C-Level Services (CS)Line Role High-Growth

Company (HD)

Consulting or Services Company (SD)

Early-stage Founder (NC)

Serial Founder (SF) CEO/Venture-backed Company (EO)

PROFILE 5CEO and Advisor

Venture-backed Private (VA)

University Faculty or Administrator (UF)

University Dean/Dept Head (UD)

Initiator Stage 1 Implementer Stage 2 Influencer Stage 3 Dealmaker Stage 4

Weighted Connected Edges: Emerging Dealmakers + Dealmakers (3 plus ties)

Initiator Stage 1 Implementer Stage 2 Influencer Stage 3 Dealmaker Stage 4

Path Dependence of Dealmakers | Typical Profiles

Finance Large Public – Associate VC – Partner VC – General Partner VC Investment Bank – Investment Partnership – Asset Mgmt –

Chair/Asset Mgmt

Entrepreneurs/Managers Large Public – Sr. HiGrowth Private – Clevel – Chair Large Private High Growth – Sr. HiGrowth –Clevel VC Backed – Partner, VC – MG,

VC Consulting Svc – Sr. Hi Growth – Jr. VC – Partner VC- MG, VC

Independents Early Stage – Serial Founder – CEO/Venture Backed – Partner, VC

Firm University Faculty – Dept Head – CEO/Venture Backed – CEO/Chair

Top Twenty University Degree Affiliations: Entrepreneurial Network of 12 Technology Hot Spots© Ted Zoller, UNC-Chapel Hill (not to be reproduced without prior permission)

Building US Entrepreneurial Economies

Develop regional entrepreneurial networks intentionally.

Look to models that derive and implement policy change through most “between central” dealmakers in the regional economy

Put a “face” on cluster analysis to facilitate development of social capital in regional entrepreneurial networks

Balance policies that encourage “garage” entrepreneurship with policies that encourage transitioning US corporate talent to high-growth entrepreneurial firms.

Consider extra-regional “integrating” networks to connect entrepreneurial clusters.

Link complementary networks throughout the US to distribute equity investing clusters with technology clusters.

With Thanks:Questions

 

Briefing to the TRE Networks RoundtableDecember 6, 2011

Ted D. Zoller, PhDDirector, UNC Center for Entrepreneurshipand Associate Professor