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To: cmg who wrote (13096)	4/30/1999 11:13:00 AM
From: Regis McConnell	Respond to of 42804

cmg, probably because the people involved want a piece of the action, & they deserve it. Regis

To: cmg who wrote (13096)	4/30/1999 11:43:00 AM
From: Sector Investor	Read Replies (1) \| Respond to of 42804

I think of it like this: Entrepreneur "A" has a great idea for a product (think of MetroFusion or Aranea). He (or she) needs: Money and time - specifically: Money to hire R&D and SG&A staff Money to buy design and engineering tools Money to buy manufacturing space and equipment Money to buy all the raw materials Money to build the inventory so they can meet demand in a timely fashon Money to market the product, etc Time to build all the above from scratch - by which time the market opportunity may have already passed. Entrepreneur A needs something faster LIKE "A" convinces Company "M" of the validity of the concept. "A" trades a big part of the ownership of his company in exchange for instant access to Company M's resources, specifically some money, joint R&D, manufacturing, design, etc. This dramatically reduces the money and time required to develop and market the product. It also allows "A" to concentrate on developing and marketing the technology (instead of a thousand other details) and getting it quickly to market. "M" gets a large chunk of a potentially hot product at small risk and cost, and now has "A" and staff working their butts off to make the venture a success. This is a Win-Win situation. Entrepreneuralship at its best.