What Harvard is Teaching MBAs About Acquisition Entrepreneurship

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For decades, Harvard’s MBA program has been primarily focused on the traditional model of entrepreneurship. In the past 6 years an elective course on the acquisition of established businesses has been attracting as many as 30% of the program’s candidates. We had the pleasure of sitting down with Royce Yudkoff, who teaches the course “Entrepreneurship For Acquisition” at Harvard Business School’s MBA program. Here at Quiet Light we’ve also had the honor of collaborating on the course for the past 5 years. Today, we delve into the details of how Harvard is sending experienced professionals out into the business acquisition marketplace with hands-on experience that is invaluable to their success.

The trend toward real-life marketplace experience as a replacement for textbooks has taken hold in Harvard’s MBA program. These case-study and field guide learning modules are teaching candidates the key ways to enter and be successful in the acquisition arena. The course Royce teaches alongside Professor Richard Ruback is focused on how to screen potential acquisition targets, do the financing, negotiate the typical deal terms, and do due diligence when buying a small business.

Episode Highlights:

  • Harvard MBAs are on average 28-35 years old so all they come into the program with professional experience.
  • The course works with real life companies and case studies so students learn about how companies succeed in buying existing businesses.
  • The course follows the entire arc of buying a small business from the search, to the financing, through due diligence, and up to the transition of ownership.
  • The participants are learning how weaving good business practices from the very start of the process leads to better chances of ROI and growth.
  • Royce explains how the candidates are taught the best financial practices for buying for a business, whether through traditional bank or private equity investment.
  • The course follows students through the program and beyond by performing surveys and gathering statistics on success rates for those who go on to acquire companies.
  • Royce shares the single most common contributor to the success and non-success in the search and acquisition process and what he advises all buyers to look for in a potentially successful business.

Transcription:

Mark: Joe did you know that a dream of mine that has gone unfulfilled in my life was to attend the Harvard Business School?

Joe: I didn’t know that knowing that your nickname was slacker in college I would think that’d be the last dream you could ever have.

Mark: Well, we technically changed my name my last year mainly because I had a t-shirt that said slacker on it. And it made a terrible first impression when you walked in the class the first day the professor sees that. You get targeted pretty quickly.

Joe: You know we did a tour of Stanford last summer because I have teenage boys. We happen to be there, my kids probably won’t get in; I understand 3% do. And when I graduated from college, I went to Northeastern University in Boston, when I was done I was done. I never wanted to go back to college. Touring a campus like Stanford or I imagine Harvard just at any age would make you want to go back.

Mark: Yeah it’s a fantastic school. I love their MBA Program there because they do things a little bit different. It’s not textbook based, it’s case study based. So a Harvard MBA student, when they attend that school first of all the school pretty much requires that you have real world experience. Not 100% but it’s really hard to get in if you don’t have any real world experience. They want people who have been out there in the field doing stuff. And the entire c

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