CHAPTER 1 OVERVIEW OF FINANCIAL REPORTING‚ FINANCIAL STATEMENT ANALYSIS‚ AND VALUATION Solutions to Questions‚ Exercises‚ and Problems‚ and Teaching Notes to Cases 1. Value Chain Analysis Applied to the Timber and Timber Products Industry. Exhibit 1.A below contains a depiction of the value chain. The links in the value chain are as follows: 1. Timber Tracts: Plant and maintain timber tracts (Weyerhaeuser) 2. Logging: Harvests timber (Weyerhaeuser) a. Sawmills:
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changing at all for decades‚ the startup funding business is now in what could‚ at least by comparison‚ be called turmoil. At Y Combinator we’ve seen dramatic changes in the funding environment for startups. Fortunately one of them is much higher valuations. The trends we’ve been seeing are probably not YC-specific. I wish I could say they were‚ but the main cause is probably just that we see trends first—partly because the startups we fund are very plugged into the Valley and are quick to take
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FIN310 - Venture Capital - Investing in early stage growth companies – Lecture 1 Brendon Blacker Monday 24 March Introduction to your guest lecturer Brendon Blacker Vice President Macquarie Capital Sydney STRICTLY CONFIDENTIAL 2 Agenda Lecture 1 – Monday 24 March 2014 1. Introduction to Macquarie Capital Lecture 2 – Monday 31 March 2014 — Review questions — Quick recap 2. Introduction to venture capital — What is venture capital? How does it work? 3. Investing in early-stage growth companies
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Trendsetter Inc. TEACHING ENTREPRENEURIAL THOUGHT & ACTION 20 March 2012 Richard T. Bliss‚ PhD Trendsetter Inc. Learning Objectives 1. The entrepreneur/VC relationship 2. Exposure to deal term sheets 3. Moving beyond valuation 4. VC negotiations 2 The Entrepreneur/VC Relationship Entrepreneur VC 3 The Entrepreneur/VC Relationship • Provisions to address adverse selection − due diligence − staging/milestones − use of convertible preferred shares • Provisions to facilitate monitoring/control
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Phantom Medical C (VC Fund): Your VC fund has recently solicited Phantom Medical (PMC) to see whether you could strike a deal for their $1.5 million in Series A capital raise (1st round capital raise). Currently the management team owns 100% of the company and there are no outside investors. Your fund in particular would provide great synergies with PMC‚ so PMC would likely embrace a deal. PMC’s management team is relatively inexperienced and unfocused‚ and you may look to replace some of
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Introduction VC Cycle Fund raising Investing VC Valuation Methods Term Sheets Design of Private Equity securities Exiting Time permitting – Corporate Venture Capital (CVC) Challenges of Venture Financing Critical issues involved in financing young firms Uncertainty Asymmetric Information Nature of Firm’s assets Conditions of relevant financial and product markets How do VCs address these problems Security Design Vesting Provisions Covenants Securities used by VCs Common Stock
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for both parties in terms of time and cost -VC can used the information to protect their interest -Venture will make careful decision-making with help company’s sustainability -Investors are given the information rights to target company. Such right informs investors with firms’ operating conditions especially when adverse events occur. Seat on the board : Zero – sum If one party’s seat increases‚ the other will lost one. VC approval : Positive – sum -VC vote is necessary for decision-making and they
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hot market (VC commitments 21% CAGR for last 5 years) and that edocs represents a unique‚ high growth/return potential investment and wants to secure the deal for itself. CRV knows that edocs could take their term sheet and try to get other VCs to outbid/offer better terms to edocs and CRV wants to avoid a bidding war which would drive up the valuation (cost) and reduce CRV’s stake. This is also an important transaction for CRV‚ particularly for Jonathan Guerster‚ as this is his first VC transaction
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process for both parties. Seats on the board Zero sum Increase one party’s seat is the lost one for another party. VC approval Positive sum 1. VC have expertise‚ and resourses in the venture capital industry‚ their votes is valuable for making decisions. 2. Benefit for VC‚ they could decide the direction of the company for their interest. 3. Benefit for the venture too. VC share many common goals (not all) with the venture itself‚ so vote can be valuable for the venture to prevent some bad
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fact that 5‚73 and 6‚1 are lower and upper bounds in the period of 1989 – 2008 plus given the fact that the financial crisis hit in 2008‚ the height of alpha = 7‚5 could be considered as a concern. Furthermore‚ Largeco calculates their returns on the VC portfolio by adding the cash-flows and the reported company values from their funds. In the 10 years that Largeco operated (2006 – 2016)‚ companies
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