TUNE - Trinity University Network of Entrepreneurs

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Backdoor Entrepreneur
Larry Moon, Holding Company CEO

Since 1980, I have been working within an organization that was created to manage and blend together multiple diverse companies. During that 25+ years, lots of thought has been given to the qualities a holding company would want in a new company and what are some of the factors that drive the new companies success or failure. I thought you might find the following of interest.

What started out as a strategy of purchasing, overseeing and financing a number of diverse companies through a holding company, evolved into a model where we are creating a collection of small start-up companies - each driven by an individual with an entrepreneurial spirit. We provide these ventures with capital, opportunity, strategic direction, connections, infrastructure, systems support and oversight. Not coincidentally, the majority of these start-ups have ultimately been related to our core business, allowing us to leverage our existing relationships and knowledge of the markets.

While the verdict is still out as to whether this Entrepreneur/Start-up model is a worthwhile long term strategy, there are a number of factors which indicate that it will prove to be profitable. Below is a table of a few of these factors and how I believe they are impacted by different growth strategies. (Click the image to view a larger version.)

When you look around and see where break-through ideas are coming from, very few come from the R&D or new product departments of existing companies (large or small). They tend to come from people who broke away from larger companies and started a concept from scratch. An entrepreneurial model allows for the business opportunity to fit what needs to be done rather than having to fit an opportunity into an existing business model.

Larry Moon is CEO and Chairman of the Sandstone Group, Inc., a 1976 graduate of Trinity University and Board member of TUNE. Larry welcomes your comments and thoughts at lmoon@elakeside.com

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