Courses:

Certain institutions have been shown to be central for the healthy development of entrepreneurial ventures. Most countries, however, possess suboptimal versions of most, if not all, of those institutions. These institutional shortcomings translate directly into structural barriers for entrepreneurship. Entrepreneurs must find ways around structural barriers, and do so in often creative ways.

Live case: Live discussion with Leila Velez, Beleza Natural

How do emerging markets differ from developed markets for entrepreneurs? What challenges and opportunities are the same? Which are different? How and why and to what degree? How do those answers change over time as markets become more established? Using the example of post-Soviet Russia, we will examine several live cases of success and failure by entrepreneurs in Russia in the last 15 years to better understand the critical differences inherent in "doing a start-up in a start-up country."

Guest speaker: William Shor, CEO, Core Carbon Group.

Study questions:

1. Russia 1995

The "Risk Factors" in this reading are part of a prospectus given to investors buying stock in a Russian candy company in 1995. Assume you are in an entrepreneur in that bleak operating environment. Which risk factors listed would be most challenging to building your start-up company? What other risks not listed here as investment risks might an entrepreneur face as well?

2. Frontier Markets

Although its founder is now a billionaire and Renaissance Capital is not at all a start-up any longer, essentially these press releases announce a strategy of new market entry and internationalization. New Market Entry is the most common type of project that teams work on in G-Lab. How would you begin the process of assessing and analyzing how (and whether) Renaissance Capital should take its business model to Africa?

3. Russia 2008

The CCG Overview deck is a slightly redacted version of the firm's actual presentation which it uses to market to potential investors. As you review the CCG Overview deck, assume you are a potential investor listening to a pitch. Think about the critical political, economic, infrastructure and legal aspects of this kind of business. What questions and challenges do you have for our guest that relate specifically to the risks of building this company in Russia? What kind of data or evidence would be necessary to persuade you to invest in CCG?

Entrepreneurship in Shanghai: getting the story right about the competitiveness of China.

Study questions:

1. What kind of entrepreneurship is most important for countries like China?
2. Should the government have an industrial policy to foster technological development?
3. What are the pros and cons of FDI in terms of growing indigenous entrepreneurship?

In this class, Professor Fiona Murray will speak about biotech companies in emerging markets. We traditionally think of the biotech industry as being dominated by firms in the US and, to a lesser extent, in Europe. However biotech firms are emerging in growing numbers in non-traditional locations including India, China, Brazil and even Cuba. In this class we will examine how these companies develop and actually take advantage of or circumvent the various institutional differences in their nations in institutions such as intellectual property, public research and healthcare.

Guest speaker: Professor Fiona Murray, MIT Sloan School

Study issues and questions:

1. Should Biocon add the Clinegene division?
2. If they were able to raise significant capital does this investment make the most sense?
3. What other investments might they consider as part of their growth?

Research methods

Team meetings

Library research: techniques and resources (Alex Caracuzzo, MIT Libraries.)

Team meetings with faculty advisors. Note: Some teams will meet during class times, others outside of class. TAs will work with the teams to schedule meetings.

Pakistan is deemed "too unstable" a country for us to send G-Lab teams to. Pakistan suffers from extreme political instability, weak rule of law, poor oversight of capital markets, and extremely limited and generally laughably poor quality research available on publicly listed companies. Yet in 2006, this country was one of the best performing emerging markets in the world, with more than US$18 billion in foreign investment. How do professional investors and multi-nationals evaluate companies and markets when considering new investments or expansion plans, when so little market and competitive data is available and when the quality of that data is often so unreliable?

This session will present a framework of standard financing and investment alternatives available to startups and entrepreneurial firms operating in emerging markets, which can often differ significantly from the options open to tech firms in Silicon Valley or Route 128. In the second half of the session, guest speakers representing early stage EM investment firms will present perspectives on how these challenges to financial modeling and investment analysis are met on a pragmatic, real-world basis.

Guest speakers: Bill Jarosz, Managing Director, Cartesian Capital; Vikram Mansharamani, SeaCross Capital

We will begin by discussing consulting best practices with a McKinsey director, then turn to a panel of G-Lab alumni for a view from the trenches on the G-Lab onsite internship, with a focus on common pitfalls and traps. We will reserve significant time for Q&A.

Guest speakers: Alex Gouvea, Director, McKinsey; G-Lab alumni