VC Research Project


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Development of the Venture Capital 4.0 Model
The Nature of the Venture Capital Business

The Objective

The 4th Industrial Revolution introduced adaptiveness in the industrial and business world. We invite VC firms to manage the concept of the 4th Industrial Revolution in their business. The objective of Venture Capital 4.0 is the establishment of a framework that allows diminishing 50% the failure rate of the business. The goal is to diminish the problems that derive from lack of growth, increase the level of predictability and controllability of businesses and drive the profit improvement of VC firms including the proposal of the adjustment of regulations to expand the business.

Introduction

This activity is for members of Venture Capital firms who have been invited by TURI. The asymmetric development of the venture capital business in the world drove to the need of revising the evolution of this business to define its nature and promote the establishment of the necessary framework to expand this business, which is a cornerstone of the building of sustainable businesses in expansive economies.

The Unicist Approach to Industry 4.0

Industry 4.0 implies introducing adaptiveness in organizations. Business functions are adaptive when their functionality is feedback dependent. The Unicist Research Institute was one of the precursors of Industry 4.0 through the development of complexity sciences to deal with adaptive systems and environments.

This concept applied to business requires managing the root causes of processes to ensure their reliability. This requires managing the concepts of the business functions involved. The level of industrialization depends on the outputs that need to be produced by the business functions. Therefore, different levels of industrialization coexist in most organizations.

Industry 4.0 became possible due to the evolution of IT technologies, conceptual management and artificial intelligence. Its goal is to develop businesses as adaptive systems, which implies customer orientation and improving productivity and quality that naturally foster market growth and profit improvement.

The implementation of Industry 4.0 in business processes might include:

  • The use of a strategic approach and business intelligence to plan and manage growth.
  • The use of tools with artificial intelligence to manage adaptive environments.
  • The use of conceptual management to define business functions.
  • The use of conceptual design to develop business processes.
  • The use of business objects to ensure the productivity and quality of business processes.
  • The use of client centered management to ensure customer orientation.
  • The use of market labs to monitor markets.
  • The use of root cause management to ensure the reliability of results.
  • The use of adaptive IT solutions.

The introduction of adaptiveness in organizations is a step by step process, that needs to generate economic benefits from the beginning. It needs to follow two basic rules:

  • It has to be introduced from “the outside to the inside”, from the external needs to the internal needs, which implies starting with the functions that influence the environment.
  • It needs to be managed from “top to bottom”, which implies the commitment of the management in this change.

The Unicist Approach: A Precursor of Industry 4.0

The unicist approach is based on the Unicist Theory, which introduced a paradigm shift in sciences that allowed managing complex adaptive entities, systems and environments. The multiple applications of the unicist theory allowed developing the paradigm shift in business to manage businesses as adaptive systems to generate sustainable growth.

The unicist paradigm shift was developed at The Unicist Research Institute, which has been, since 1976, a pioneer in complexity science research, that is fully focused on developing solutions to deal with adaptive entities, systems and environments.

The focus on sustainable growth drove to the development of the Unicist Conceptual Management approach to manage businesses as adaptive systems. It allows introducing the concept of Industry 4.0 and applying it beyond productive processes. Unicist Conceptual Management was developed to manage sustainable growth.

The following technologies are part of Industry 4.0:

  1. Unicist Business Strategy:to develop maximal strategies to grow and minimum strategies to ensure profits.
  2. Unicist Conceptual Management:to manage businesses as adaptive systems and organize using business objects.
  3. Unicist Root Cause Management:to manage the root causes of business problems based on the knowledge of the fundamentals of the business functions.
  4. Unicist Root Cause Marketing: to expand markets based on the management of the root causes of buying processes.

As the previous industrial revolutions, Industry 4.0 will coexist with the previous stages, providing a significant competitive advantage for those who can enter this stage.

A Revolution for Growth

The evolution of IT, Internet and Artificial Intelligence finally allowed transforming adaptiveness into the 4th Industrial Revolution. Growth and business expansion is the effect produced by the introduction of this revolution. Growth is the consequence of adaptiveness, which allows empowering customer centricity while increasing productivity and quality.

Learn more: https://www.unicist.net/financials/industry-4-0

The Basics Behind this Project

The Unicist paradigm shift in sciences, based on the discovery of the intelligence that underlies nature, expanded the boundaries of sciences and allowed managing the adaptive aspects of reality by managing the underlying concepts, making them reasonable, understandable and predictable. It drove to the development of the unicist paradigm shift in business to increase the predictability and controllability of businesses.
https://www.unicist.org/scientific-dissemination/index.php

Managing the Root Causes of the VC business – The Nature of Venture Capital

The conceptual structures of businesses define the DNA of their business functions and drive their sustainability. Therefore, concepts and fundamentals define the root causes of business problems and the root drivers of business solutions. The unicist paradigm shift in businesses establishes the framework of the development of the Venture Capital 4.0 business model based on the empowerment of the predictability and controllability of businesses introduced by Unicist Strategy, Unicist Conceptual Management, and Unicist Business Intelligence.

The objective of this model is the establishment of a framework that takes advantage of the knowledge of the conceptual structures of business functions, of the markets and of economic and social behavior.

The Collaborative Research Project

This project, as all the activities of The Unicist Research Institute, begins with the use of a “prototype” that works as a hypothetical solution that is changed and modified until a final solution has been confirmed.

This project is developed with industry leaders and is coordinated by Peter Belohlavek
https://www.unicist.org/peter-belohlavek.php )

The participation of the members of this project is virtual with two real time activities per month (1 hour) plus a destructive testing system for the solutions that are being built. There is a private forum to exchange opinions among the members and a private system to discuss with the coordinator.

All participants need to access the Unicist Business Strategy model, that allows developing maximal and minimum strategies managing the root causes of businesses. For this purpose, they participate in a virtual program that includes 4 virtual 2-hour micro-clinics and a counseling process that allows accessing the growth, predictability and controllability of businesses.

Roles of the Members

There are two types of roles for the participants:

  • Active members, who participate in the whole process with an involvement of 6 hours monthly.
  • Assessment members: who only participate in the destructive testing of the solutions.

Timeframe

This project will be finished within 6 months. Participants might be included during the development processes after they access the Unicist Business Strategy model. The goal is to develop a model that empowers the business and allows influencing the establishment of regulations that foster its evolution.

Output

The output is a solution that adopts the format of an e-book, provisionally named “The Nature of the Venture Capital Business”, that includes the credits for all the participants. This e-book includes not only the model but also recommendations to be introduced in the regulation of this business to empower its expansion.

Final Meeting

A final personal meeting will take place if there is consensus about having this live meeting with the participants. This meeting includes the presentation of the e-book.

Managing the Root Causes of Growth and Profitability

Unicist concepts and fundamentals define the root-causes of problems and are the root-drivers of solutions. They allow defining what is possible to be achieved and developing maximal strategies to grow and minimum strategies to ensure profits.

Benefits

The unicist approach to business is based on the research of the concepts that underlie business functions that allowed dealing with their nature, managing the root-causes of problems and the root-drivers of solutions to define structural business solutions that:

  1. increase significantly the effectiveness of business processes.
  2. allow expanding the boundaries of businesses without changing their concepts.
  3. reduce notoriously the costs.
  4. ensure the achievement of results

Synthesis

The concepts and fundamentals that underlie business functions are the root-drivers of their functionality. The eventual dysfunctionality of the fundamentals is the root-cause of the problems of a business function.

That is why concepts define the structure of any business function and drive its evolution. It has to be considered that the structure of the concept of a business function, that emulates the intelligence of nature, needs to be known to solve root-causes and uses root-drivers to build solutions.

The Idea of the Concept of Venture Capital 4.0

The Item 3 defines the role of what we named Venture Capital 4.0. It implies introducing systems that allow transforming entrepreneurial approaches into sustainable enterprises. This is what the Unicist Systems allow managing by installing Unicist Strategy, Unicist Conceptual Management, Unicist Business Intelligence and Root Cause Management.

The higher the level of adaptiveness the higher the level of conceptual business knowledge is required. The higher the level of controllability the more efficient an organization needs to work.

Adaptability requires managing the Know-Why of business functions while Controllability requires managing the Know How of business processes.

The higher the level of adaptiveness the higher the level of ambiguity that needs to be managed.

The Concept of the Business

The purpose of the venture capital business is to be able to manage the risks implicit in the investment. It has to be considered that the purpose of risk management is to ensure the results of the business by increasing its level of predictability and controllability.

The maximal strategy of the business is ensuring growth which is the most complex aspect because it depends on the value added to the market, the competitive advantage and the influence the business has in an environment.

On the other hand, the minimum strategy of the business is to ensure profits which depend on the organizational capacity and the resilience of the management of the company.

The Context of the Business

What we propose is to consider that the evolution of a business occurs as follows.

  1. The creator has a valuable solution and installs a business that, by definition, is owner centered.
  2. Angel/Seed Funds should provide the necessary business knowledge to move the business from a solopreneuring approach to an entrepreneurial approach. An extreme level of conceptual business knowledge is required to define business functions. Angel funds catalyze the first level of professionalization of businesses.
  3. Venture Capital should provide the necessary business knowledge to move the business from an entrepreneurial approach to an enterprising approach where the organization works as a system. A high level of conceptual business knowledge is needed to define sustainable business functions. It implies achieving the necessary speed of growth while managing the profitability of the investment. Venture Capital firms build the sustainability of businesses and their critical mass in the market while they catalyze growth and profitability.
  4. Private equity should provide the adequate financial strategies to sustain growth based on the functionality of businesses and allow growth by finding business synergies that allow expanding the boundaries of business. The knowledge of the business scenario is needed to expand boundaries growth.
  5. Public offer requires a level of maturity that ensures the sustainability avoiding the volatility of equity value.

The Venture Capital business has a significant economic and social value in the environment because it drives businesses and the economy to a superior level of sustainability. Its development should be promoted by the administrations to foster the expansion of the business.

Contact: n.i.brown(at)unicist.org