The Catalyst of American Entrepreneurship:

the Dealmakers Role in the Establishment of High Performance Entrepreneurial Networks

Briefing to the TRE Networks Roundtable

December 6, 2011
Ted D. Zoller, PhD Director, UNC Center for Entrepreneurship and Associate Professor

Please do not publish or distribute without prior permission.

Networks and Economic Performance of Entrepreneurial Economies

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

Whos the Who?

Dealmakers Conceptualized

???????

Investors Entrepreneurs

Aggregate View of Social Capital

Dealmakers Conceptualized . Broker Information and Resources Shape Deal Networks

Dealmakers

Syndicate and Interconnect

Structured View of Social Capital

Dealmakers Conceptualized

Dealmakers Conceptualized

Dealmakers Conceptualized

Dealmakers Algorithm In Brief

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.

Whos the Who?

ExtraRegional (outside Technopole) IntraRegional (within Technopole)

Conceptual Model

DEALMAKERS

4+

Emerging Dealmakers
Brokers

3+

Nested Interlocks:
Actors within Firms within Regions

Serial Dealmakers 2+
SU/SO Firm
Mgmt Team

Investor

Founder/ Management

Board

Investor

Entrepreneur

Regions/Industries Specified

Information Technology Industry Classifications Information Technology (Primary) Telecommunication Services (Primary) Life Sciences and Biotech Industry Classifications Healthcare Equipment and Supplies (Primary) Pharmaceuticals, Biotechnology and Life Sciences (Primary) Health Care Technology (Primary)

Entrepreneurial Firm Birth Results 1984-2009

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

Dealmaker Concurrent Ties: All Technopoles

# of Actors in Network (Regional Entrepreneurial Economy) 4(1026) 5(603) 6 (391)

Concurrent Social Network Ties (Board and Firm Interlocks)

Correlation Matrix

Total Associated 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

Emerging Dealmaker and Dealmaker 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

Dealmaker 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

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 Carolinas Dealmaker Network

???????

North Carolina Entrepreneurial Economy

Concentration of Equity Holdings by Sector

Healthcare Energy Industrials Information Tech Telecom

North Carolina Aggregate Entrepreneurial Network

Healthcare Energy Industrials Information Tech Telecom

North Carolina Aggregate Entrepreneurial Network

Healthcare Energy Industrials Information Tech Telecom

North Carolina Dealmaker Entrepreneurial Network

Healthcare Energy

Charlotte-RTP Dealmaker Bridge N=126

Industrials Information Tech Telecom

North Carolina Dealmaker Entrepreneurial Network

Healthcare Energy Industrials Information Tech Telecom

Research Triangle Park Aggregate Entrepreneurial Network

Life Sciences Energy Industrials Information Tech Telecom

Research Triangle Park Aggregate Entrepreneurial Network

Life Sciences Energy Industrials Information Tech Telecom

Research Triangle Park Dealmaker Entrepreneurial Network

Life Sciences Energy Industrials Information Tech Telecom

Dealmaker Career Pathways

Financial/Securities Analyst (FA) Partner, Asset Manager/PE (PE) Principal, Investment Partnership (RI) Investment Banking/Asset Management (IB) Director, Investment/Merchant Banking (DB) Chairman, Asset Manager/PE (CP)

Jr. Partner, VC Firm (JV)

Partner, VC Firm (PV)

Managing General Partner, VC Firm (GV)

Principal/Associate VC Firm (VC)

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 Venturebacked (CV)

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

HNW/Angel Investor and Advisor (AN)

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)

Manager, Large Public Corporation (CD)

Sr./VP High Growth Private Company (HV)

Consulting or Services Company (SD) CEO/Venture-backed Company (EO) CEO and Advisor Venture-backed Private (VA)

Serial Founder (SF) Early-stage Founder (NC)

University Faculty or Administrator (UF)

University Dean/Dept Head (UD)

Initiator Stage 1

Serial Stage 2

Emerging Dealmaker Stage 3

Dealmaker Stage 4

Entrepreneur

Line Role High-Growth Company (HD)

Partner/Principal, Services Company (SV)

C-Level Services (CS)

Investor

Partner/VP, Investment Bank/Partnership (PI)

Managing Director, Investment/Merchant Bank (MB)

Financial/Securities Analyst (FA) Partner, Asset Manager/PE (PE) Principal, Investment Partnership (RI) Investment Banking/Asset Management (IB) Director, Investment/Merchant Banking (DB) Partner/VP, Investment Bank/Partnership (PI)

PROFILE 4
Chairman Asset Manager/PE (CP)

Managing Director, Investment/Merchant Bank (MB)

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

Principal/Associate VC Firm (VC)

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 Venturebacked (CV)

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

PROFILE 6
High Profile and Net Worth Angel Investor and Advisor (AN)

Sr./VP High Growth Public Company (HU)

C-Level High Growth Public (CU)

CEO/Chairman High Growth Public Company (EU)

PROFILE 2
Partner and Advisor VC Firm (PC)

Manager, Large Public Corporation (CD)

Sr./VP High Growth Private Company (HV)

Consulting or Services Company (SD) CEO/Venture-backed Company (EO)

PROFILE 5
CEO and Advisor Venture-backed Private (VA)

Serial Founder (SF) Early-stage Founder (NC)

University Faculty or Administrator (UF)

University Dean/Dept Head (UD)

Initiator Stage 1

Serial Stage 2

Emerging Dealmaker Stage 3

Dealmaker Stage 4

Entrepreneur

Line Role High-Growth Company (HD)

Partner/Principal, Services Company (SV)

C-Level Services (CS)

Investor

PROFILE 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

Initiator Stage 1

Implementer Stage 2

Influencer Stage 3

Dealmaker Stage 4

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 Roundtable December 6, 2011

Ted D. Zoller, PhD Director, UNC Center for Entrepreneurship and Associate Professor