Friday, February 24, 2017

Entrepreneur training 1: Anatomy of a Business

Anatomy of a Business

From this week, I will write a series of posts on the training I am currently getting at Berkeley. The blog will contain the training I had and key points I learned from it (You may read it, and feel it is too scattered, because it serves as the purpose to remind me what I learned in the future). The teacher is Naeem Zafar, a very successful entrepreneur. 
I feel I need understand how to become an entrepreneur if in the future I have the chances, it is better to learn now. Even though I decide to stay in academia as a Faculty, but to do good research and being an entrepreneur is not conflict with each other. Just image, if for some research, we can turn that into a self-sustainable entity, and provide support for further research, why not! Besides, I realize that a lot of the things covered in the training actually applicable to other aspects of my life. I think even in the future I will not take the entrepreneur path, it is still will teach me a lot of things that benefit my life. 
Ok, let's start with this first week - Anatomy of a Business. 
We start by asking the question 'What is Business?'. 
  • Designing a box that can increase the money you put into it
  • Creating a cash flow engine
Types of business
  • For profit (C-corp. & others) i.e. Google, IBM
  • Non-profit (501C3 ...) i.e. Red cross
  • Benefit corporation (B-corp.) i.e. Social good business
The idea of separating a company from human identity is brilliant. Dutch East India company is the first company. 
How a company structure:
  • Shareholders own the company
  • Shareholders elect a board of directors
  • Board of directors will select the CEO
  • CEO represents shareholder's interests and will hire people to run the company. 
  • The real power is the board of directors
Types of company
  • C-Corporation
  • S-Corporation
  • LLC (Limited Liability Company)
  • Sole proprietorship
  • DBA (Doing Business As) 
Private or Public company
  • Who can buy shares in a company? Anyone or accredit investors?
  • The first day you can sell the share to public, it is called — IPO (Initial Public Offering)
The difference between C-Corp. and LLC is the C-Corporation will not pass profit to the shareholders, and it pays tax by itself. Most of the C-Corporation don’t have dividend, but if you have dividend, then the shareholders have to pay for tax. But most C-Corporations do not pass this to shareholders. This is the biggest difference between the LLC, who will pass the profit to the shareholder, and they will pay for the tax. But the LLC company itself not paying tax.
S1 - The Discourse the company have to make after going to public

Acknowledgements:

All the materials are from the entrepreneurship class at UC Berkeley taught by Naeem Zafar

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