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Proof Of Concept & Legal Formation

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Micro Strategy for Proof of Concept comprises three principal components that must be in place to test any given concept. The entrepreneur must provide the goals that they are attempting to achieve which will indicate their outcomes. Take into account all assets that go into the venture like the financial needs as well as the physical, human and social needs which all factor in the outcome of the business. A proof of concept is a shared idea in the business industry, new start-ups or entrepreneurs validate if a company, and or products are feasible. Customarily, a broad study and analysis of a proof of concept is a single package submitted to investors and interested parties. The proof of concept maybe used in research and development, and a range of other fields.


What are the principles behind the micro-strategy approach to proof of concept? When a company invests in another company or project, typically a proof of concept is essential to validate the proposal is financially a sound investment. Occasionally, building a proof of concept involves producing a simple prototype, to show the idea or method could work and many companies will build a small demonstration to show potential investors how it might look and feel. Nevertheless, sometimes people confuse a Proof of Concept that may involve building a prototype or conducting a demonstration, but that is in itself not the Proof of Concept.

The Proof of Concept is about the vendor’s viability and the entrepreneur cultivating a clear understanding of needs of the customer. Using a prototype diminishes the threat of product failure. The principles behind the micro-strategy approach to proof of concept, usually includes an assessment of the revenue as well as companies showing anticipated income from the product and service, which specify improvement costs, long-term financial forecasts, and how much it will cost to maintain and market. There is an appraisal of the intellectual property rights involved, and the company may need to pay for licensing. What an investor/banker needs to see is tangible proof of concept like purchase orders for the product or service. You must prove that the consumers want your product.

What are the principles behind the micro-strategy approach to proof of concept? Entrepreneurial ventures work on the principle of profitability and growth with a long-term goal to dominate the market based on innovating products, procedures, or practices. There exists difference between strategic orientations of entrepreneurial and small ventures. Not all small ventures work on innovations or dominance motive. (Matthews and Scot, 1995) The major things that investors are interested in are the rate of growth, return on investment Degree of risk and degree of protection. In general, report creation in Micro Strategy achieved through using integrated reporting, analysis, and monitoring software that helps leading establishments worldwide make better business decisions every day. Companies choose Micro Strategy for its advanced technical capabilities, sophisticated analytics, and superior data and user scalability. Develop a reporting environment as part of a proof-of-concept. Good strategy with good strategy execution equals good management.

What key factors determine the strategic plan for the legal organization of the business? Strategy is important for every organization; however, some strategies are clearly better than others are. A number of factors influence the effectiveness of business strategies. The strategies apply to the organization as a whole or a specific department, function or specific project. A company’s strategy is administration’s game plan for how to cultivate the business, how to appeal to and satisfy customers, how to compete successfully, how to conduct operations, as well as achieving targeted objectives. There are advantages and disadvantages to each organizational form and the entrepreneur must calculate the costs and benefits of these advantages and disadvantages. (Matthews and Scot, 1995) PRINCIPLES BEHIND THE MICRO-STRATEGY

What key factors determine the strategic plan for the legal organization of the business? The proprietorship is the simplest legal form of organization LFO—one that has no separate legal existence from its owner. Proprietorship is simply a person operating a business under her own name or a trade name.There are no legal requirements to operate a proprietorship. The owner is personally responsible for all legal responsibilities of the business and their personal capital is at risk. Partnership- the partnership established as a legal business entity a group of two or more persons goes in into a legal contract by which the partners agree to operate a business and share the profits from that business. There are limitations on the life span of a partnership; it ends with The death of the last original partner. On the other hand, ownership of a partnership will be allocated into shares to be bought or sold.

Corporation – A corporation is separate legal entities from its owner and. recognized as “legal person” that will enter into contracts and has all the legal rights of a “natural person.” all owners of a corporation enjoy limited liability. In contrast to a proprietorship and partnership, a corporation enjoys a limitless life. There are two primary types of corporations in the U.S.—the C-corporation and the S-corporation. C-corporation- C-corporations are subject to corporate income tax at both federal and state levels. Any earnings dispersed to shareholders as dividends are subject to a second level of taxation at personal income tax rates. Since some state corporate income tax rates are higher than individual rates, a business organized as a regular corporation may pay higher state taxes than if it is organized as a partnership or S-corporation.

What key factors determine the strategic plan for the legal organization of the business? S-corporations -An S-corporation is a firm that elects special tax status as defined by the Internal Revenue Code. They have a minimum of 100 shareholders all must be U.S. citizens or residents, they are limited to one class of stock and a limit on the number of shareholders. With Profits & losses allocated in percentage to each shareholder’s interest. Limited-Liability Company – The limited-liability company (“LLC”) is a comparatively new business structure acceptable under most state laws, it is a cross between the partnership and the S-corporation. For federal tax purposes, an LLC must decide how their treated as a partnership, a corporation, or, for single-owners, a proprietorship. An LLC is not required to have a board of directors or officers.

Deciding the right strategy and legal operations of your business takes serious planning and a real study on which plan will work best for your venture. You may start with one legal strategy and as the business expands, you can change your legal options. Many firms begin as a proprietorship, while some begin as limited-liability companies and as corporations. Things to remember are know the business strategic plan from the beginning. Also, know all the options for changing the legal form as well as the anticipated capital and the tax implications for proprietors and members “Organizations need the courage to try something risky that they don’t know will work. Why? Because if they know it will work, they will only get an improvement to what they already have. Yet if they try something that is a little dangerous and new, they will realize true innovation.” Michael Stanleigh (Arrow 1974)


Arrow, Kenneth J. (1974). The Limits of Organizations. New York, Norton and Company, Inc. Matthews, C. M., and S. G. Scott. 1995. Uncertainty and Planning in Small and Entrepreneurial Firms: An Empirical Assessment. Journal of Small Business Management, October Table 1

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