Entrepreneurial finance:
Gespeichert in:
| Hauptverfasser: | , |
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| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Boston, MA
Cengage Learning
[2021]
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| Ausgabe: | Seventh edition, student edition |
| Schlagworte: | |
| Online-Zugang: | Inhaltsverzeichnis |
| Beschreibung: | xvii, 696 Seiten Diagramme |
| ISBN: | 9780357442043 |
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MARC
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Datensatz im Suchindex
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| adam_text | է Preface xi About the Authors xvii PART 1 THE ENTREPRENEURIAL ENVIRONMENT 1 CHAPTER 1 Introduction to Finance for Entrepreneurs 3 1.1 The Entrepreneurial Process 5 1.2 Entrepreneurship Fundamentals 6 Who is an Entrepreneur? 6 Basic Definitions 7 Entrepreneurial Traits or Characteristics 7 Opportunities Exist but Not Without Risks 8 1.3 Sources of Entrepreneurial Opportunities 9 Societal Changes 9 Demographic Changes 12 Technological Changes 12 Emerging Economies and Global Changes 13 Crises and Bubbles 14 Disruptive Innovation 15 1A Principles of Entrepreneurial Finance 15 Real, Human, and Financial Capital Must be Rented from Owners (Principle #1) 16 Risk and Expected Reward Go Hand in Hand (Principle #2) 16 While Accounting is the Language of Business, Cash is the Currency (Principle #3) 17 New Venture Financing Involves Search, Negotiation, and Privacy (Principle #4) 17 A Venture s Financial Objective is to Increase Value (Principle #5) 18 It is Dangerous to Assume that People Act Against their Own Self-Interests (Principle #6) 19 Venture Character and Reputation Can be Assets or Liabilities (Principle #7) 20 1.5 Roleof Entrepreneurial Finance 21 1.6 The Successful Venture Life Cycle 23 Development Stage 24 Startup Stage 24 Survival Stage 24 Rapid-Growth Stage 24 Early-Maturity Stage 25 Life Cycle Stages and the Entrepreneurial Process 25 1.7 Financing Through the Venture Life Cycle 26 Seed Financing 27 Startup Financing 27 First-Round Financing 28 Second-Round Financing 28 Mezzanine Financing 29 Liquidity-Stage Financing 29 Seasoned Financing 30 1.8 Life Cycle
Approach for Teaching Entrepreneurial Finance 30 Summary 34 CHAPTER 2 Developing the Business Idea 41 2.1 Process for Identifying Business Opportunities 43 2.2 To be Successful, You Must Have a Sound Business Model 44 Component 1 :The Business Model Must Generate Revenues 45 Component 2: The Business Model Must Make Profits 45 Component 3:The Business Model Must Produce Free Cash Flows 46 2.3 Learn from the Best Practices of Successful Entrepreneurial Ventures 47 Best Marketing Practices 47 Best Financial Practices 48 Best Management Practices 49 Best Production or Operations Practices are also Important 49 2.4 Time-to-Market and Other Timing Implications 49 2.5 Initial Litmus Test for Evaluating the Business Feasibility of an Idea 51 2.6 Screening Venture Opportunities 53 An Interview With the Founder (Entrepreneur) and Management Team: Qualitative Screening 54 Scoring a Prospective New Venture: Quantitative Screening 58 Industry/Market Considerations 61 Pricing/Profitability Considerations 62 Financial/Harvest Considerations 65 Management Team Considerations 67 Opportunity Screening Caveats 67 2.7 Key Elementsofa Business Plan 69 Cover Page, Confidentiality Statement, and Table of Contents 69 Executive Summary 71 Business Description 71 Marketing Plan and Strategy 71 Operations and Support 71 Management Team 72 Financial Plans and Projections 72 v
vi Contents Risks and Opportunities 73 Business Plan Appendix 75 Summary 75 Appendix A Applying the VOS Indicator™: An Example 81 PART 2 ORGANIZING AND OPERATING THE VENTURE 85 CHAPTER 3 Organizing and Financing a New Venture 87 3.1 Progressing Through the Venture Life Cycle 89 3.2 Forms of Business Organization 89 Proprietorships 92 General and Limited Partnerships 93 Corporations 97 Limited Liability Companies 99 3.3 Choosing the Form of Organization: Tax and Other Considerations 100 3.4 Intellectual Property 104 Protecting Valuable Intangible Assets 104 What Kinds of Intellectual Property Can be Protected? 104 Copyrights 111 Other Methods for Protecting Intellectual Property Rights 111 Employment Contracts 112 3.5 Seed, Startup, and First-Round Financing Sources 113 Financial Bootstrapping 114 Business Angel Funding 117 First-Round Financing Opportunities 119 Summary 120 CHAPTER 4 Preparing and Using Financial Statements 127 4.1 Obtaining and Recording the Resources Necessary to Start and Build a New Venture 129 4.2 Business Assets, Liabilities, and Owners Equity 130 Balance Sheet Assets 132 Liabilities and Owners Equity 133 4.3 Sales, Expenses, and Profits 134 4.4 Internal Operating Schedules 136 4.5 Statement of Cash Flows 140 4.6 Operating Breakeven Analyses 142 Survival Breakeven 142 Identifying Breakeven Drivers in Revenue Projections 147 Summary 149 Appendix A NOPAT Breakeven: Revenues Needed to Cover Total Operating Costs 156 CHAPTER 5 Evaluating Operating and Financial Performance 159 5.1 Users of Operating and Financial Performance Measures by Life Cycle Stage
161 5.2 Using Financial Ratios 162 5.3 Cash Burn Rates and Liquidity Ratios 165 Measuring Venture Cash Burn and Build Amounts and Rates 165 Beyond Burn: Traditional Measures of Liquidity 167 Interpreting Cash-Related and Liquidity-Related Trends 168 5.4 Leverage Ratios 170 Measuring Financial Leverage 170 Interpreting Changes in Financial Leverage 172 5.5 Profitability and Efficiency Ratios 173 Income Statement Measures of Profitability 173 Efficiency and Return Measures 175 Interpreting Changes in Profitability and Efficiency 177 5.6 Industry Comparable Ratio Analysis 178 5.7 A Hitchhiker s Guide to Financial Analysis 179 Summary 182 PART 3 PLANNING FOR THE FUTURE 191 CHAPTER 6 Managing Cash Flow 193 6.1 Financial Planning throughout the Venture s Life Cycle 194 6.2 Surviving in the Short Run 196 6.3 Short-Term Cash-Planning Tools 198 6.4 Projected Monthly Financial Statements 202 6.5 Cash Planning from a Projected Monthly Balance Sheet 205 6.6 Conversion Period Ratios 206 Measuring Conversion Times 206 Interpreting Changes in Conversion Times 210 Summary 212 CHAPTER 7 Types and Costs of Financial Capital 221 7.1 Implicit and Explicit Financial Capital Costs 223 7.2 Financial Markets 223 7.3 Determining the Cost of Debt Capital 225 Determinants of Market Interest Rates 227 Risk-Free Interest Rate 227 ՛
Contents Default Risk Premium 228 Liquidity and Maturity Risk Premiums 231 A Word on Venture Debt Capital 234 7.4 What is Investment Risk? 234 Measuring Risk as Dispersion Around an Average 234 Historical Return Versus Risk Relationships 238 7.5 Estimating the Cost of Equity Capital 240 Cost of Equity Capital for Public Corporations 241 Cost of Equity Capital for Private Ventures 243 Sources and Costs of Venture Equity Capital 245 7.6 Weighted Average Cost of Capital 247 A Life Cycle-Based WACC Example 248 Summary 250 Appendix A Using WACC to Complete the Calibration of EVA 258 CHAPTER 8 Securities Law Considerations When Obtaining Venture Financing 261 8.1 Review of Sources of External Venture Financing 263 8.2 Overview of Federal and State Securities Laws 265 Securities Act of 1933 266 Securities Exchange Act of 1934 266 Investment Company Act of 1940 267 Investment Advisers Act of 1940 267 Jumpstart Our Business Startups Act of 2012 268 State Securities Regulations: Blue-Sky Laws 269 8.3 Process for Determining Whether Securities Must be Registered 270 Offer and Sale Terms 270 What is a Security? 271 8.4 Registration of Securities Under the Securities Act of 1933 272 8.5 Security Exemptions from Registration Under the 1933 Act 276 8.6 Transaction Exemptions from Registration Under the 1933 Act 278 Private Offering Exemption 278 Accredited Investor Exemption 280 8.7 SEC s Regulation D: Safe-Harbor Exemptions 281 Rule 504: Exemption for Limited Offerings and Sales of Securities not Exceeding $5 Million 282 Rule 506: Exemption for Limited Offers and Sales Without Regard to
Dollar Amount of Offering 283 8.8 Regulation a Security Exemption 289 8.9 JOBS Act Innovations 290 Summary 290 Appendix A Schedule A (Securities Act of 7933, as Amended) 294 ՝ vii Appendix В Selected SEC Regulation D Materials 299 Appendix C Other Forms of Registration Exemptions and Breaks 326 PART 4 CREATING AND RECOGNIZING VENTURE VALUE 329 CHAPTER 9 Projecting Financial Statements 331 9.1 Long-Term Financial Planning Throughout the Venture s Life Cycle 332 9.2 Beyond Survival: Systematic Forecasting 334 Forecasting Sales for Seasoned Firms 334 Forecasting Sales for Early-Stage Ventures 336 9.3 Estimating Sustainable Sales Growth Rates 340 9.4 Estimating Additional Financing Needed to Support Growth 344 The Basic Additional Funds Needed Equation 345 Impact of Different Growth Rates on AFN 347 Estimating the AFN for Multiple Years 348 9.5 Percent-of-Sales Projected Financial Statements 349 Forecasting Sales 349 Projecting the Income Statement 350 Projecting the Balance Sheet 351 Forecasting the Statement of Cash Flows 353 Financing Cost Implications Associated with the Need for Additional Funds 354 Summary 355 CHAPTER 10 Valuing Early-Stage Ventures 361 10.1 What is a Venture Worth? 363 Does the Past Matter? 363 Looking to the Future 364 Vested Interests in Value: Investor and Entrepreneur 364 10.2 Basic Mechanics of Valuation: Mixing Vision and Reality 366 Present Value Concept 366 If You re not Using Estimates, You re not Doing a Valuation 367 Divide and Conquer with Discounted Cash Flow 369 10.3 Required versus Surplus Cash 372 10.4 Developing the Projected Financial
Statements for a DCF Valuation 374
viii Contents 10.5 Just-In-Time Equity Valuation: Pseudo Dividends 378 12.9 Distributing Cash and Securities Proceeds 478 Summary 479 10.6 Accounting versus Equity Valuation Cash Flow 385 Origins of Accounting Cash Flows 385 CHAPTER 13 From Accounting to Equity Valuation Cash Flows 386 Other Financing Alternatives 483 Summary 390 13.1 Business Incubators, Seed Accelerators, and Intermediaries 485 Business Incubators and Seed Accelerators 485 CHAPTER 11 Venture Capital Valuation Methods 409 11.1 Brief Review of Basic Cash Flow-Based Equity Valuations 411 11.2 Basic Venture Capital Valuation Method 413 Using Present Values 416 Using Future Values 416 11.3 Earnings Multipliers and Discounted Dividends 417 11.4 Adjusting VCSCs for Multiple Rounds 419 Intermediaries, Facilitators, and Consultants 486 13.2 Business Crowdsourcing and Crowdfunding 487 13.3 Commercial and Venture Bank Lending 488 13.4 Understanding Why You May not Get Debt Financing 491 13.5 Creditcards 493 13.6 Foreign Investor Funding Sources 494 13.7 Small Business Administration Programs 494 Overview of What the SBA does for Small Businesses 495 First Round 420 Second Round 420 11.5 Adjusting VCSCs for Incentive Ownership 421 First Round 422 Second Round 422 Incentive Ownership Round 422 11.6 Adjusting VCSCs for Payments to Senior Security Holders 423 11.7 Introducing Scenarios to VCSCs 424 Utopian Approach 425 Mean Approach 426 Summary 431 PART 5 Structuring Financing for the Growing Venture 455 CHAPTER 12 Professionai Venture Capital 457 12.1 Historical Characterization of Professional Venture Capital 459 12.2
Professional Venture Investing Cycle: Overview 463 12.3 Determining (Next) Fund Objectives and Policies 464 12.4 Organizing the New Fund 465 12.5 Soliciting Investments in the New Fund 468 12.6 Obtaining Commitments for a Series of Capital Calls 469 12.7 Conducting Due Diligence and Actively Investing 470 12.8 Arranging Harvest or Liquidation 477 Selected SBA Loan and Operating Specifics 496 13.8 Other Government Financing Programs 497 13.9 Factoring, Receivables Lending, and Customer Funding 498 13.10 Debt, Debt Substitutes, and Direct Offerings 500 Vendor Financing: Accounts Payable and Trade Notes 500 Mortgage Lending 500 Traditional and Venture Leasing 500 Direct Public Offers 501 Summary 502 Appendix A Summary of Colorado Business Financial Assistance Options 505 CHAPTER 14 Security Structures and Determining Enterprise Values 507 14.1 Common Stock or Common Equity 509 14.2 Preferred Stock or Preferred Equity 510 Selected Characteristics 510 Convertible Preferreds 511 Conversion Value Protection 513 Conversion Protection Clauses 514 Conversion Price Formula (CPF) 514 Market Price Formula (MPF) 514 14.3 Convertible Debt 516 14.4 Warrants and Options 517 14ձ Other Concerns About Security Design 523
Contents 14.6 Valuing Ventures with Complex Capital Structures: The Enterprise Method 524 Summary 531 PART 6 Exit and Turnaround Strategies 543 CHAPTER 15 Harvesting the Business Venture Investment 545 15.1 Venture Operating and Financial Decisions Revisited 547 15.2 Planning an Exit Strategy 548 15.3 Valuing the Equity or Valuing the Enterprise 550 Relative Valuation Methods 550 Dividing the Venture Valuation Pie 551 15.4 Systematic Liquidation 553 15.5 Outright Sale 554 Family Members 554 Managers 555 Employees 558 Outside Buyers 559 15.6 Going Public 561 Investment Banking 561 Some Additional Definitions 564 Other Costs in Issuing Securities 565 Post-IPO Trading 566 Contemplating and Preparing for the IPO Process 569 Summary 574 Cash Flow Insolvency 586 Temporary versus Permanent Cash Flow Problems 587 16.3 Resolving Financial Distress Situations 588 Operations Restructuring 590 Asset Restructuring 593 Financia! Restructuring 595 16.4 Private Workouts and Liquidations 596 Private Workouts 596 Private Liquidations 597 Venture Example: Jeremy s Microbatch Ice Creams, Inc. 598 16.5 Federal Bankruptcy Law 598 Bankruptcy Reorganizations 599 Reasons for Legal Reorganizations 600 Legal Reorganization Process 602 Bankruptcy Liquidations 605 Summary 609 PART 7 CAPSTONE CASES CASE 1 Eco-Products, Inc. 617 CASE 2 Spatial Technology, Inc. 647 Glossary 673 Index 681 CHAPTER 16 Financially Troubled Ventures: Turnaround Opportunities? 581 16.1 Venture Operating and Financing Overview 583 16.2 The Troubled Venture and Financial Distress 584 Balance Sheet Insolvency 585 ІХ 615
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է Preface xi About the Authors xvii PART 1 THE ENTREPRENEURIAL ENVIRONMENT 1 CHAPTER 1 Introduction to Finance for Entrepreneurs 3 1.1 The Entrepreneurial Process 5 1.2 Entrepreneurship Fundamentals 6 Who is an Entrepreneur? 6 Basic Definitions 7 Entrepreneurial Traits or Characteristics 7 Opportunities Exist but Not Without Risks 8 1.3 Sources of Entrepreneurial Opportunities 9 Societal Changes 9 Demographic Changes 12 Technological Changes 12 Emerging Economies and Global Changes 13 Crises and "Bubbles" 14 Disruptive Innovation 15 1A Principles of Entrepreneurial Finance 15 Real, Human, and Financial Capital Must be Rented from Owners (Principle #1) 16 Risk and Expected Reward Go Hand in Hand (Principle #2) 16 While Accounting is the Language of Business, Cash is the Currency (Principle #3) 17 New Venture Financing Involves Search, Negotiation, and Privacy (Principle #4) 17 A Venture's Financial Objective is to Increase Value (Principle #5) 18 It is Dangerous to Assume that People Act Against their Own Self-Interests (Principle #6) 19 Venture Character and Reputation Can be Assets or Liabilities (Principle #7) 20 1.5 Roleof Entrepreneurial Finance 21 1.6 The Successful Venture Life Cycle 23 Development Stage 24 Startup Stage 24 Survival Stage 24 Rapid-Growth Stage 24 Early-Maturity Stage 25 Life Cycle Stages and the Entrepreneurial Process 25 1.7 Financing Through the Venture Life Cycle 26 Seed Financing 27 Startup Financing 27 First-Round Financing 28 Second-Round Financing 28 Mezzanine Financing 29 Liquidity-Stage Financing 29 Seasoned Financing 30 1.8 Life Cycle
Approach for Teaching Entrepreneurial Finance 30 Summary 34 CHAPTER 2 Developing the Business Idea 41 2.1 Process for Identifying Business Opportunities 43 2.2 To be Successful, You Must Have a Sound Business Model 44 Component 1 :The Business Model Must Generate Revenues 45 Component 2: The Business Model Must Make Profits 45 Component 3:The Business Model Must Produce Free Cash Flows 46 2.3 Learn from the Best Practices of Successful Entrepreneurial Ventures 47 Best Marketing Practices 47 Best Financial Practices 48 Best Management Practices 49 Best Production or Operations Practices are also Important 49 2.4 Time-to-Market and Other Timing Implications 49 2.5 Initial "Litmus Test"for Evaluating the Business Feasibility of an Idea 51 2.6 Screening Venture Opportunities 53 An Interview With the Founder (Entrepreneur) and Management Team: Qualitative Screening 54 Scoring a Prospective New Venture: Quantitative Screening 58 Industry/Market Considerations 61 Pricing/Profitability Considerations 62 Financial/Harvest Considerations 65 Management Team Considerations 67 Opportunity Screening Caveats 67 2.7 Key Elementsofa Business Plan 69 Cover Page, Confidentiality Statement, and Table of Contents 69 Executive Summary 71 Business Description 71 Marketing Plan and Strategy 71 Operations and Support 71 Management Team 72 Financial Plans and Projections 72 v
vi Contents Risks and Opportunities 73 Business Plan Appendix 75 Summary 75 Appendix A Applying the VOS Indicator™: An Example 81 PART 2 ORGANIZING AND OPERATING THE VENTURE 85 CHAPTER 3 Organizing and Financing a New Venture 87 3.1 Progressing Through the Venture Life Cycle 89 3.2 Forms of Business Organization 89 Proprietorships 92 General and Limited Partnerships 93 Corporations 97 Limited Liability Companies 99 3.3 Choosing the Form of Organization: Tax and Other Considerations 100 3.4 Intellectual Property 104 Protecting Valuable Intangible Assets 104 What Kinds of Intellectual Property Can be Protected? 104 Copyrights 111 Other Methods for Protecting Intellectual Property Rights 111 Employment Contracts 112 3.5 Seed, Startup, and First-Round Financing Sources 113 Financial Bootstrapping 114 Business Angel Funding 117 First-Round Financing Opportunities 119 Summary 120 CHAPTER 4 Preparing and Using Financial Statements 127 4.1 Obtaining and Recording the Resources Necessary to Start and Build a New Venture 129 4.2 Business Assets, Liabilities, and Owners' Equity 130 Balance Sheet Assets 132 Liabilities and Owners' Equity 133 4.3 Sales, Expenses, and Profits 134 4.4 Internal Operating Schedules 136 4.5 Statement of Cash Flows 140 4.6 Operating Breakeven Analyses 142 Survival Breakeven 142 Identifying Breakeven Drivers in Revenue Projections 147 Summary 149 Appendix A NOPAT Breakeven: Revenues Needed to Cover Total Operating Costs 156 CHAPTER 5 Evaluating Operating and Financial Performance 159 5.1 Users of Operating and Financial Performance Measures by Life Cycle Stage
161 5.2 Using Financial Ratios 162 5.3 Cash Burn Rates and Liquidity Ratios 165 Measuring Venture Cash Burn and Build Amounts and Rates 165 Beyond Burn: Traditional Measures of Liquidity 167 Interpreting Cash-Related and Liquidity-Related Trends 168 5.4 Leverage Ratios 170 Measuring Financial Leverage 170 Interpreting Changes in Financial Leverage 172 5.5 Profitability and Efficiency Ratios 173 Income Statement Measures of Profitability 173 Efficiency and Return Measures 175 Interpreting Changes in Profitability and Efficiency 177 5.6 Industry Comparable Ratio Analysis 178 5.7 A Hitchhiker's Guide to Financial Analysis 179 Summary 182 PART 3 PLANNING FOR THE FUTURE 191 CHAPTER 6 Managing Cash Flow 193 6.1 Financial Planning throughout the Venture's Life Cycle 194 6.2 Surviving in the Short Run 196 6.3 Short-Term Cash-Planning Tools 198 6.4 Projected Monthly Financial Statements 202 6.5 Cash Planning from a Projected Monthly Balance Sheet 205 6.6 Conversion Period Ratios 206 Measuring Conversion Times 206 Interpreting Changes in Conversion Times 210 Summary 212 CHAPTER 7 Types and Costs of Financial Capital 221 7.1 Implicit and Explicit Financial Capital Costs 223 7.2 Financial Markets 223 7.3 Determining the Cost of Debt Capital 225 Determinants of Market Interest Rates 227 Risk-Free Interest Rate 227 ՛
Contents Default Risk Premium 228 Liquidity and Maturity Risk Premiums 231 A Word on Venture Debt Capital 234 7.4 What is Investment Risk? 234 Measuring Risk as Dispersion Around an Average 234 Historical Return Versus Risk Relationships 238 7.5 Estimating the Cost of Equity Capital 240 Cost of Equity Capital for Public Corporations 241 Cost of Equity Capital for Private Ventures 243 Sources and Costs of Venture Equity Capital 245 7.6 Weighted Average Cost of Capital 247 A Life Cycle-Based WACC Example 248 Summary 250 Appendix A Using WACC to Complete the Calibration of EVA 258 CHAPTER 8 Securities Law Considerations When Obtaining Venture Financing 261 8.1 Review of Sources of External Venture Financing 263 8.2 Overview of Federal and State Securities Laws 265 Securities Act of 1933 266 Securities Exchange Act of 1934 266 Investment Company Act of 1940 267 Investment Advisers Act of 1940 267 Jumpstart Our Business Startups Act of 2012 268 State Securities Regulations:"Blue-Sky"Laws 269 8.3 Process for Determining Whether Securities Must be Registered 270 Offer and Sale Terms 270 What is a Security? 271 8.4 Registration of Securities Under the Securities Act of 1933 272 8.5 Security Exemptions from Registration Under the 1933 Act 276 8.6 Transaction Exemptions from Registration Under the 1933 Act 278 Private Offering Exemption 278 Accredited Investor Exemption 280 8.7 SEC's Regulation D: Safe-Harbor Exemptions 281 Rule 504: Exemption for Limited Offerings and Sales of Securities not Exceeding $5 Million 282 Rule 506: Exemption for Limited Offers and Sales Without Regard to
Dollar Amount of Offering 283 8.8 Regulation a Security Exemption 289 8.9 JOBS Act Innovations 290 Summary 290 Appendix A Schedule A (Securities Act of 7933, as Amended) 294 ՝ vii Appendix В Selected SEC Regulation D Materials 299 Appendix C Other Forms of Registration Exemptions and Breaks 326 PART 4 CREATING AND RECOGNIZING VENTURE VALUE 329 CHAPTER 9 Projecting Financial Statements 331 9.1 Long-Term Financial Planning Throughout the Venture's Life Cycle 332 9.2 Beyond Survival: Systematic Forecasting 334 Forecasting Sales for Seasoned Firms 334 Forecasting Sales for Early-Stage Ventures 336 9.3 Estimating Sustainable Sales Growth Rates 340 9.4 Estimating Additional Financing Needed to Support Growth 344 The Basic Additional Funds Needed Equation 345 Impact of Different Growth Rates on AFN 347 Estimating the AFN for Multiple Years 348 9.5 Percent-of-Sales Projected Financial Statements 349 Forecasting Sales 349 Projecting the Income Statement 350 Projecting the Balance Sheet 351 Forecasting the Statement of Cash Flows 353 Financing Cost Implications Associated with the Need for Additional Funds 354 Summary 355 CHAPTER 10 Valuing Early-Stage Ventures 361 10.1 What is a Venture Worth? 363 Does the Past Matter? 363 Looking to the Future 364 Vested Interests in Value: Investor and Entrepreneur 364 10.2 Basic Mechanics of Valuation: Mixing Vision and Reality 366 Present Value Concept 366 If You're not Using Estimates, You're not Doing a Valuation 367 Divide and Conquer with Discounted Cash Flow 369 10.3 Required versus Surplus Cash 372 10.4 Developing the Projected Financial
Statements for a DCF Valuation 374
viii Contents 10.5 Just-In-Time Equity Valuation: Pseudo Dividends 378 12.9 Distributing Cash and Securities Proceeds 478 Summary 479 10.6 Accounting versus Equity Valuation Cash Flow 385 Origins of Accounting Cash Flows 385 CHAPTER 13 From Accounting to Equity Valuation Cash Flows 386 Other Financing Alternatives 483 Summary 390 13.1 Business Incubators, Seed Accelerators, and Intermediaries 485 Business Incubators and Seed Accelerators 485 CHAPTER 11 Venture Capital Valuation Methods 409 11.1 Brief Review of Basic Cash Flow-Based Equity Valuations 411 11.2 Basic Venture Capital Valuation Method 413 Using Present Values 416 Using Future Values 416 11.3 Earnings Multipliers and Discounted Dividends 417 11.4 Adjusting VCSCs for Multiple Rounds 419 Intermediaries, Facilitators, and Consultants 486 13.2 Business Crowdsourcing and Crowdfunding 487 13.3 Commercial and Venture Bank Lending 488 13.4 Understanding Why You May not Get Debt Financing 491 13.5 Creditcards 493 13.6 Foreign Investor Funding Sources 494 13.7 Small Business Administration Programs 494 Overview of What the SBA does for Small Businesses 495 First Round 420 Second Round 420 11.5 Adjusting VCSCs for Incentive Ownership 421 First Round 422 Second Round 422 Incentive Ownership Round 422 11.6 Adjusting VCSCs for Payments to Senior Security Holders 423 11.7 Introducing Scenarios to VCSCs 424 Utopian Approach 425 Mean Approach 426 Summary 431 PART 5 Structuring Financing for the Growing Venture 455 CHAPTER 12 Professionai Venture Capital 457 12.1 Historical Characterization of Professional Venture Capital 459 12.2
Professional Venture Investing Cycle: Overview 463 12.3 Determining (Next) Fund Objectives and Policies 464 12.4 Organizing the New Fund 465 12.5 Soliciting Investments in the New Fund 468 12.6 Obtaining Commitments for a Series of Capital Calls 469 12.7 Conducting Due Diligence and Actively Investing 470 12.8 Arranging Harvest or Liquidation 477 Selected SBA Loan and Operating Specifics 496 13.8 Other Government Financing Programs 497 13.9 Factoring, Receivables Lending, and Customer Funding 498 13.10 Debt, Debt Substitutes, and Direct Offerings 500 Vendor Financing: Accounts Payable and Trade Notes 500 Mortgage Lending 500 Traditional and Venture Leasing 500 Direct Public Offers 501 Summary 502 Appendix A Summary of Colorado Business Financial Assistance Options 505 CHAPTER 14 Security Structures and Determining Enterprise Values 507 14.1 Common Stock or Common Equity 509 14.2 Preferred Stock or Preferred Equity 510 Selected Characteristics 510 Convertible Preferreds 511 Conversion Value Protection 513 Conversion Protection Clauses 514 Conversion Price Formula (CPF) 514 Market Price Formula (MPF) 514 14.3 Convertible Debt 516 14.4 Warrants and Options 517 14ձ Other Concerns About Security Design 523
Contents 14.6 Valuing Ventures with Complex Capital Structures: The Enterprise Method 524 Summary 531 PART 6 Exit and Turnaround Strategies 543 CHAPTER 15 Harvesting the Business Venture Investment 545 15.1 Venture Operating and Financial Decisions Revisited 547 15.2 Planning an Exit Strategy 548 15.3 Valuing the Equity or Valuing the Enterprise 550 Relative Valuation Methods 550 Dividing the Venture Valuation Pie 551 15.4 Systematic Liquidation 553 15.5 Outright Sale 554 Family Members 554 Managers 555 Employees 558 Outside Buyers 559 15.6 Going Public 561 Investment Banking 561 Some Additional Definitions 564 Other Costs in Issuing Securities 565 Post-IPO Trading 566 Contemplating and Preparing for the IPO Process 569 Summary 574 Cash Flow Insolvency 586 Temporary versus Permanent Cash Flow Problems 587 16.3 Resolving Financial Distress Situations 588 Operations Restructuring 590 Asset Restructuring 593 Financia! Restructuring 595 16.4 Private Workouts and Liquidations 596 Private Workouts 596 Private Liquidations 597 Venture Example: Jeremy's Microbatch Ice Creams, Inc. 598 16.5 Federal Bankruptcy Law 598 Bankruptcy Reorganizations 599 Reasons for Legal Reorganizations 600 Legal Reorganization Process 602 Bankruptcy Liquidations 605 Summary 609 PART 7 CAPSTONE CASES CASE 1 Eco-Products, Inc. 617 CASE 2 Spatial Technology, Inc. 647 Glossary 673 Index 681 CHAPTER 16 Financially Troubled Ventures: Turnaround Opportunities? 581 16.1 Venture Operating and Financing Overview 583 16.2 The Troubled Venture and Financial Distress 584 Balance Sheet Insolvency 585 ІХ 615 |
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| author | Leach, J. Chris Melicher, Ronald W. |
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| discipline | Wirtschaftswissenschaften |
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| edition | Seventh edition, student edition |
| format | Book |
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| genre | 1\p (DE-588)4123623-3 Lehrbuch gnd-content |
| genre_facet | Lehrbuch |
| id | DE-604.BV046667506 |
| illustrated | Not Illustrated |
| index_date | 2024-07-03T14:20:36Z |
| indexdate | 2024-07-10T08:50:44Z |
| institution | BVB |
| isbn | 9780357442043 |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-032078534 |
| oclc_num | 1164612051 |
| open_access_boolean | |
| owner | DE-355 DE-BY-UBR DE-739 DE-2070s DE-20 |
| owner_facet | DE-355 DE-BY-UBR DE-739 DE-2070s DE-20 |
| physical | xvii, 696 Seiten Diagramme |
| publishDate | 2021 |
| publishDateSearch | 2021 |
| publishDateSort | 2021 |
| publisher | Cengage Learning |
| record_format | marc |
| spelling | Leach, J. Chris Verfasser (DE-588)173773850 aut Entrepreneurial finance J. Chris Leach (The University of Colorado at Boulder), Ronald W. Melicher (The University of Colorado at Boulder) Seventh edition, student edition Boston, MA Cengage Learning [2021] xvii, 696 Seiten Diagramme txt rdacontent n rdamedia nc rdacarrier Entrepreneurship (DE-588)7588126-3 gnd rswk-swf Finanzierung (DE-588)4017182-6 gnd rswk-swf Unternehmensgründung (DE-588)4078599-3 gnd rswk-swf 1\p (DE-588)4123623-3 Lehrbuch gnd-content Entrepreneurship (DE-588)7588126-3 s Unternehmensgründung (DE-588)4078599-3 s Finanzierung (DE-588)4017182-6 s 2\p DE-604 Melicher, Ronald W. Verfasser (DE-588)170278743 aut Digitalisierung UB Regensburg - ADAM Catalogue Enrichment application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=032078534&sequence=000001&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis 1\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk 2\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk |
| spellingShingle | Leach, J. Chris Melicher, Ronald W. Entrepreneurial finance Entrepreneurship (DE-588)7588126-3 gnd Finanzierung (DE-588)4017182-6 gnd Unternehmensgründung (DE-588)4078599-3 gnd |
| subject_GND | (DE-588)7588126-3 (DE-588)4017182-6 (DE-588)4078599-3 (DE-588)4123623-3 |
| title | Entrepreneurial finance |
| title_auth | Entrepreneurial finance |
| title_exact_search | Entrepreneurial finance |
| title_exact_search_txtP | Entrepreneurial finance |
| title_full | Entrepreneurial finance J. Chris Leach (The University of Colorado at Boulder), Ronald W. Melicher (The University of Colorado at Boulder) |
| title_fullStr | Entrepreneurial finance J. Chris Leach (The University of Colorado at Boulder), Ronald W. Melicher (The University of Colorado at Boulder) |
| title_full_unstemmed | Entrepreneurial finance J. Chris Leach (The University of Colorado at Boulder), Ronald W. Melicher (The University of Colorado at Boulder) |
| title_short | Entrepreneurial finance |
| title_sort | entrepreneurial finance |
| topic | Entrepreneurship (DE-588)7588126-3 gnd Finanzierung (DE-588)4017182-6 gnd Unternehmensgründung (DE-588)4078599-3 gnd |
| topic_facet | Entrepreneurship Finanzierung Unternehmensgründung Lehrbuch |
| url | http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=032078534&sequence=000001&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |
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