MIT Open Course Ware Managing Innovation and Entrepreneurship Managing Innovation and Entrepreneurship Managing Innovation: Emerging Trends Early Stage Capital Designing and Leading the Entrepreneurial Organization Law for the Entrepreneur and Manager Entrepreneurial Marketing Entrepreneurial Finance Listening to the Customer Pricing The Nuts and Bolts of … Read More →
Tag Archives: Finance
How is the Canadian venture capital industry going compared to the US?
People in the venture capital industry know that the VC industry is not going well in Canada. That is why it is even more important to know the situation in a quatitative point of view. The SME Financing Data Initiative is a government website that publishes … Read More →
Entrepreneurial Finance – Horizon Communications Corporation (A)
My last post from the Entrepreneurial Finance course is here. Today, I want to share my summary of the Horizon Communications Corporation (A) case study. This document basically shows the industry background of telecommunication in the 90′s. Basically, it highlights the Telecommunications Act of 1996 … Read More →
Entrepreneurial Finance – Centex Telemanagement, Inc.
I’ve started studying the Entrepreneurial Finance at MIT OpenCourseWare by myself a month ago. I wrote my first post about the first case study here (Technical Data Corporation Business Plan). Until now, I think the selection of the case studies are awesome. It presents many … Read More →
An Unlikely Marriage: Koenigsegg and Saab
I’ve been following many news related to the GM’s sale of Saab to Koenigsegg and I’m very curious about the outcome of this situation. I searched Google to see if there was any news of small companies buying big companies and I couldn’t find any … Read More →
Entrepreneurial Finance – Technical Data Corporation Business Plan
The Technical Data Corporation Business Plan is the first case study from the Entrepreneurial Finance course from MIT OpenCourseWare. It is a business plan prepared by Jeffrey P. Parker in late 1980. The case describes that Technical Data wants to raise $100,000 before the end … Read More →
MIT OpenCourseWare – Entrepreneurial Finance
There is an amazing course for people seeking to work in the private equity, venture capital industry and entrepreneurship. The Entrepreneurial Finance is an open course that focus on the finance of start-up ventures. It addresses some of the important questions such as: - how much … Read More →
New Valuation for Facebook
Wow, this is increadible. Facebook is receiving $ 200 million for 1.96%! To calculate the post valuation, we just need to do this: X = post-valuation X = 200 million / 0.0196 = 10 204 million = $ 10 billion roughly. Amazing how this company … Read More →
What is Private Equity?
Private Equity in London? Private equity is a medium to long-term finance (10 years). Private equity firms provide money to companies in exchange of equity and control. Venture capital funds are a type of private equity investment. The main specialty of a VC firm is … Read More →
Differences Between Venture Capital and Private Equity
In a academic view, we could define venture capital as those firms that invest in early stage startups and private equity are firms that invest in later stage companies or public companies. However, both have the same investment style. They invest in companies in exchange … Read More →
Stages in Venture Capital Funding
Venture Capital Investment Stages (Click the image to see the big version) This is a rough view of the venture capital investment stages. These stages are for guidance only. In the real world, there is no standard in the classification of the investment stage. Sometimes, … Read More →
VC Discount Rate Decreases in Later Stages
In many text books and even some Harvard cases, you can see that venture capitalists ask for a lower discount rate for later stage startups. This can be represented here: The reason why the discount rate decreases over time is the increasing information about the … Read More →
The Venture Capitalist’s Discount Rate
In my last post about “Venture Capital Funds Return Still High“, you read that in general the venture capital funds are performing better then public companies indexes. However, the performance rate is extremely low compared to the discount rate used by venture capitalists during a … Read More →
Venture Capital Funds Return Still High
National Venture Capital Association (NVCA) reported that venture capital performance showed positive returns across all investment horizons 3 years and longer for the period ending December 31, 2008. As you can see in the table, venture returns across all horizons outperformed public market indices, … Read More →
Venture Capital Looks for Another Exit
Today, I just read an interesting article about a possible new exit event that venture capitalists, startups employees and other investors could do. SecondMarket is a marketplace where people can sell and buy “illiquid assets”. Illiquid assets are anything that people cannot … Read More →
All posts related to Venture Capital Method!
This is the post for all the current material about Venture Capital Method! Venture Capital Method: Valuation Considering Schedule Slip in the Startup Venture Capital Method: Valuation Considering Multiple Rounds of Investments Venture Capital Method: Valuation Considering Granting Stock Options to Management … Read More →
Intro to Finance & Valuation PPT
I was searching for anything from the net and I found an interesting introductory deck about venture capital. If you are interested in the basics of VC, this is a good starting point. It also has a more “equational” view of the venture capital method. … Read More →
Solution: Leonardo needs return of 30% instead of 50%
Remember from our last post. - Carlos told us that his company has 5,000,000 shares outstanding. Leonardo wants 30% of return rate instead of 50%. Let X be the number of shares purchased by the VC. Let’s figure out the TOTAL … Read More →
The Early Stage Valuations by Venture Capital Method
A small Article from Mark Davis from CFJ Gotham Ventures was explaining the needs to protect the investors money by adjusting the risk of a venture with the amount of equity needed to compensate the risk. There is one exercise from the Harvard Busienss School … Read More →
The HR Acquisition – Basic financing
I read a very interesting article about HR Acquisition from “A VC” blog. It shows what a HR Acquisition is and how to calculate the acquisition of a target company in simple financial model. A must read for people who want to work in the … Read More →