DOCSLIB.ORG

Copyrighted Material

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Copyrighted Material k Trim Size: 6in x 9in Mellen433835 bindex.tex V1 - 03/31/2018 6:17pm Page 465 Index Accountants, 69, 251. See also Professional Advertising capacity, 147 advisors Advisory team, 69–71. See also Professional Accounting Alternative for private advisors companies, 311, 316, 325 Alliances, 78 Accounting standards Alpha, 142 International Financial Reporting Alternatives to sale/transfer of business, Standards (IFRS). See International 71–73 Financial Reporting Standards (IFRS) Altman, Edward, 59 U.S. GAAP. See Generally accepted American Institute of Certified Public accounting principles (GAAP) Accountants (AICPA), 312 Accounting Standards Codification (ASC) Valuation of Privately-Held Company ASC 350 Goodwill and Other Intangible Equity Securities Issued as Assets, 311, 325–326 Compensation (Practice Aid), 358–390 ASC 718 Stock Compensation, 354 Amortization, 335, 336 k ASC 805 Business Combinations, 311, 312, Angel investors, 355, 359, 360 k 315–329, 331 Appraisal Foundation, 312 ASC 820, Fair Value Measurements, 311, Appraisals, 200, 217, 218, 226, 353–354 313–315, 320, 323, 326, 327, 334, 336 Appraisers, 232, 251, 312, 313 Accounts receivable, 55, 202 Artistic-related intangible assets, 318. See also Accrual basis of accounting, 109 Intangible assets Acquisition method of accounting, 323 ASC. See Accounting Standards Codification Acquisition premium, 9 (ASC) Acquisition team, 80, 81, 85, 383, 384 Assembled workforce, 317, 328, 333, 340, Acquisitions 349–351 described, 78 Asset (cost) approach planning for. See Planning for merger and accounts receivable, 202 acquisition processhttp://www.pbookshop.comadjusted book value method, 102, and shareholder value, 91 202–208, 231, 418 and strategic plan, 91 appraisals, 200, 226 target companies, 82–85 asset surpluses or shortages, 207 types of, 79 book value versus market value, 200 Activity ratios, 53–57 as check to value, 231 Adjusted book valueCOPYRIGHTED method, 102, 202–208, defined, MATERIAL 101, 102 231, 418 in economic or industry downturns, 201, Adjustments 202 assets (adjusted book value method), and fair market value, 202 202–207 going concern value, 201 control adjustments, 110–112, 117, high-tech start-ups, 364 215–216, 224 holding companies, 201 financial statements, 109–112, 117, 188, and income approach, 120, 207, 208 221, 222 intangible assets, 333, 349–352 premiums and discounts. See Discounts; liquidation value method, 102, 201, 202 Premiums and market approach, 120, 207, 208 465 k k Trim Size: 6in x 9in Mellen433835 bindex.tex V1 - 03/31/2018 6:17pm Page 466 466 Index Asset (cost) approach (contd.) Bloomberg, 387 methods, 102 Book value, 20, 35, 57, 110, 136, 170, 177, and noncontrolling interests, 201, 202, 200, 231 206, 227 Bottom fishers, 200 nonoperating assets, 120, 204–207 Bring-along rights, 281 off-balance sheet assets and liabilities, Brokers. See Business brokers 202, 206–208 Build-up model replacement cost method (RCM), 333, described, 143 343, 349–350 Duff & Phelps Risk Premium Report Size reproduction cost, 333 Study (D&P report), 149, 150 use of, 103, 199, 200, 208, 218, 219, 226, equity risk premium, 143, 144 333 formula for, 144 value conclusion, review of, 226, 227 risk-free rate, 143, 144 Asset sales, 185, 271–279 small-company risk premium, 142–145, Asset turnover, 35–38, 57 157 Assets specific-company risk premium, contingent, 324 143–149 contributory, 335, 340, 343, 344 use of, 223 highest and best use, 315 Business broker method, 231 intangible. See Intangible assets Business brokers, 5, 84, 185. See also surpluses or shortages, 207 Professional advisors value of and measure of investment, 20 Business combinations and value of company, 23 ASC 805 Business Combinations, 311, 312, value of in income approach, 120. 315–329, 331 See also Income approach defined, 316 value of in market approach, 120. See also financial reporting, 315–329. See also k Market approach Financial reporting k ASU-2014-18 (customer relationship and forms of, 78, 79 non-compete non-recognition), 317 Business Exit Readiness Index™ (BERI), ASU-2014-2 (goodwill amortization), 317, 325 257–259 @Risk, 113 Business owners. See also Buyers; Exit Attorneys, 69, 70, 81, 89, 251. See also planning; Sellers Professional advisors divorce, disability, and death, impact of, Auditing standards 249, 250 AU-C Section 540–Auditing Accounting and financial planning, 247–249 Estimates, Including Fair Value investment versus employment in Accounting Estimates, and Related company, 245, 246 Disclosures, 313http://www.pbookshop.commultiple owners, 244, 247, 250, 253 AU-C Section 500–Audit Evidence, 313 succession planning, 63, 65, 69, 71, 199, Audits 200, 266, 287 fair value estimates, 312, 313 Buy-sell agreements, 354 legal audit, 71, 72 Buy-side considerations cross-border transactions, 381–390 Balance sheet entry price, 313 adjustments, 110, 111, 202–208 Buyers off-balance sheet assets, 202, 206–207 bottom fishers, 200 Bankruptcy, 58, 59. See also Solvency financial, 7, 23 measures motives, 65 Bargain purchase, 324 strategic, 7–10, 12, 13, 23, 357 Beta (ß), 140–143, 152, 157, 223 walk-away price, 9 BIZCOMPS, 182 BizMiner, 176 Capital, access to, 146 Black-Scholes Option Pricing Model Capital Adequacy Opinion, 290 (BSOPM), 115–117, 213, 357 Capital, cost of. See Cost of capital k k Trim Size: 6in x 9in Mellen433835 bindex.tex V1 - 03/31/2018 6:17pm Page 467 Index 467 Capital asset pricing model (CAPM) Collars, 275, 276 assumptions, 139, 140, 157 Common stock, 138, 139 beta, 140, 141 Company analysis, 52, 53. See also and closely-held businesses, 140, 141 Competitive analysis; Financial analysis cost of equity computation, 141 Compensation formula for, 140 control adjustments, 110–112, 117, modified capital asset pricing model, 142, 215–216, 224 143, 156, 223 employment agreements, 285 use of, 139, 223 stock options. See Stock options Capital expenditures, 21, 31, 105, 106, 147 Competitive analysis. See also High-tech Capital IQ, 182, 187, 448 start-ups Capital leases, 206 company analysis, 52, 53 Capital structure, 31, 146, 354 competitive factors for nonpublic entities, Capitalization of cash flow in single-period 53, 54 capitalization method (SPCM), 102 financial analysis, 54–59 Capitalization of earnings in single-period industry analysis, 49–52 capitalization method (SPCM), 102 and macroenvironmental risk, 49–53 Capitalization rate overview, 59, 60 discounted cash flow (DCF), 126, 128, qualitative versus quantitative 132, 133 assessments, 41 single-period capitalization method risk and value drivers, analysis of, 42 (SPCM), 121–123 specific-company risk, assessment of, Cash basis of accounting, 109 48–53 Cash burn rate, 355, 356 strategic planning and value creation, Cash terms, 279 43, 44 k Cavendish Seafood Distributors, valuation and value creation, 41 k example Competitive Strategy (Porter), 50, 132 adjusted book value method, 418 Consultants, 69 background information, 10, 11, 399–401 Contiguous acquisitions, 79 economic conditions, 402, 403 Contingent consideration, 324 fair market value, calculation of, 11 Continuum of value, 264–265 growth forecast, 404 Contract-based intangible assets, 318, 332 impairment testing example, 325–326 Contractual backlog. See Order backlogs investment value computation, 420–427 Contributory asset charges, 335, 340, 343, 344 investment value to strategic buyer, 12, 13 Control adjustments, 109, 110, 215–216, 224 owner’s concerns, 11 Control premium, 8, 158, 211–212, 215, 216 potential buyers, 401, 402 Controlling interests purchase price allocation,http://www.pbookshop.com 324, 325 control adjustments, 109, 110, 215–216, specific industry conditions, 403 224 stand-alone fair market value, 404–418 described, 209 value conclusion considerations, 427, 428 valuation considerations, 227 Certified in Entity and Intangible Valuations Convertible debt, 22 (CEIV), 312 Corporate culture, 66, 97 Chakrabarti, Rajesh, 393 Corporate practices and procedures, 332 Change-in-control provisions, 281, 286 Cost approach. See Asset (cost) approach Charitable remainder trusts, 266 Cost of capital. See also WACC (weighted Checks to value, 218–220, 231, 232 average cost of capital) Chicago Mercantile Exchange, 387 build-up model, 143–151 Closely-held businesses capital asset pricing model, 139–142, 156 and capital asset pricing model (CAPM), common errors in computing, 176–179 140, 141 common stock, cost of, 138, 139 and WACC computation, 170, 171 debt capital, cost of, 136–138, 169 Contingent consideration. See Earn-outs described, 135, 136 Coefficient of variation, 113, 118 discount rate, 22, 135 k k Trim Size: 6in x 9in Mellen433835 bindex.tex V1 - 03/31/2018 6:17pm Page 468 468 Index Cost of capital. See also WACC (contd.) Damodaran, Aswath, 362, 388 equity cost for target company, example Days in accounts payable, 55 of determining, 157–158 Days in inventory, 56 equity cost versus debt cost, 136, 137 Days in receivables, 55 Ibbotson SBBI 2009 Valuation Yearbook Days in working capital, 56 (SBBI), 135, 144 DCF method compared, 124 international cost of capital, 156, 387–390 Deal negotiation. See Negotiations preferred stock, cost of, 138 Deal size, 4 private cost of capital, 153–156 Deal structure required rate of return, 20, 22, 24, 34, 135 as part of offering memorandum, Cost reductions, 93, 94, 120 75, 78 Covenant not to compete. See Non-compete stock versus assets, 271–279 agreements and transaction multiples, 185 Coverage ratios, 53, 57, 58 Deal terms Cross-border transactions cash, 279 acquisition team, 383, 384 negotiations, 279–282 buy-side considerations, 381–390 as part of
Load more

Recommended publications
  • Evaluation of Young Companies / Startups Based on the Multiples
    Hochschule für Wirtschaft und Recht, Berlin Wintersemester 2017/18 Bachelorarbeit Erstprüfer: Dipl.-Kfm. Reinhard Borck Zweitprüfer: Prof. Dr. Martin Užik Evaluation of young companies / startups based on the multiples approach and DCF method Eingereicht von: Abdürrahim Derin Martrikelnummer: 461885 Studiengang: IBAEX, BA Eidesstattliche Erklärung Hiermit erkläre ich an Eides Statt, dass ich die vorliegende Abschlussarbeit selbstständig und ohne fremde Hilfe verfasst und andere als die angegebenen Quellen und Hilfsmittel nicht benutzt habe. Die den benutzten Quellen wörtlich oder inhaltlich entnommen Stellen (direkte oder indirekte Zitate) habe ich unter Benennung des Autors/der Autorin und der Fundstelle als solche kenntlich gemacht. Sollte ich die Arbeit anderweitig zu Prüfungszwecken eingereicht haben, sei es vollständig oder in Teilen, habe ich die Prüfer/innen und den Prüfungsausschuss hierüber informiert. Name, Vorname: Derin, Abdürrahim Matrikelnummer: 461885 Ort, Datum Unterschrift Abstract In this paper the concept of startups is explained in more detail, occasions for the valuation of these type of companies and the procedures for determining the company value presented. Two processes, the Multiples approach and the DCF method are applied to one example case. Finally, the results of both methods are compared and evaluated. For future work, there are also further possibilities for company valuation by young companies. Table of Contents 1. Introduction ..............................................................................................................
    [Show full text]
  • Valuing Young Startups Is Unavoidably Difficult: Using (And Misusing) Deferred-Equity Instruments for Seed Investing
    University of New Hampshire University of New Hampshire Scholars' Repository University of New Hampshire – Franklin Pierce Law Faculty Scholarship School of Law 6-25-2020 Valuing Young Startups is Unavoidably Difficult: Using (and Misusing) Deferred-Equity Instruments for Seed Investing John L. Orcutt University of New Hampshire Franklin Pierce School of Law, Concord, New Hampshire, [email protected] Follow this and additional works at: https://scholars.unh.edu/law_facpub Part of the Banking and Finance Law Commons, and the Commercial Law Commons Recommended Citation John L. Orcutt, Valuing Young Startups is Unavoidably Difficult: Using (and Misusing) Deferred-Equity Instruments for Seed Investing, 55 Tulsa L.Rev. 469 (2020). This Article is brought to you for free and open access by the University of New Hampshire – Franklin Pierce School of Law at University of New Hampshire Scholars' Repository. It has been accepted for inclusion in Law Faculty Scholarship by an authorized administrator of University of New Hampshire Scholars' Repository. For more information, please contact [email protected]. 42208-tul_55-3 Sheet No. 58 Side A 05/15/2020 10:30:18 ORCUTT J - FINAL FOR PUBLISHER (DO NOT DELETE) 5/14/2020 9:49 AM VALUING YOUNG STARTUPS IS UNAVOIDABLY DIFFICULT: USING (AND MISUSING) DEFERRED- EQUITY INSTRUMENTS FOR SEED INVESTING John L. Orcutt* I. ASTARTUP’S LIFE AND FUNDING CYCLES ............................................................... 474 II. VALUING YOUNG STARTUPS .................................................................................
    [Show full text]
  • Politecnico Di Milano
    POLITECNICO DI MILANO SCHOOL OF ARCHITECTURE URBAN PLANNING CONSTRUCTION ENGINEERING Management of Built Environment Facility Management in Iran, a New Approach Towards Customer Service Academic Year 2017/18 Supervisor: Professor: Prof. Andrea Ciaramella Co-supervisor: PhD Candidate Alberto Celani Thesis of: Mehdi Poorfarsi 840761 Contents FIGURE INDEX ............................................................................................................................................. 4 TABLE INDEX ............................................................................................................................................... 7 Abstract ...................................................................................................................................................... 9 CHAPTER ONE ........................................................................................................................................... 11 Definitions ................................................................................................................................................ 11 1.1) Map of Thesis .................................................................................................................................... 12 1.2) Maintenance ..................................................................................................................................... 12 1.2.1) Maintenance types ......................................................................................................................
    [Show full text]
  • Can the Crowd Bridge the Cleantech Financing Gap? a Comparative Analysis of Equity Crowdfunding and Venture Capital Returns in the US
    Can the Crowd Bridge the Cleantech Financing Gap? A comparative analysis of Equity Crowdfunding and Venture Capital returns in the US Harvard Extension School ALM in Extension Studies, Field: Sustainability Student Name: Seif Belhani HUID: 91171260 May 2019 Can the Crowd Bridge the Cleantech Financing Gap? ii Abstract Sustainability has become one of the most discussed topics on the social, economic and political stages. While many experts and policymakers acknowledge the need for funneling more capital towards clean technologies (Cleantech) in order to achieve a genuine transition to a more sustainable economy, there is growing evidence that the current efforts are not only insufficient but that investments in the green sector are, in fact, decreasing. This is particularly true for the early stages of Cleantech innovation. This paper explores new private capital models which can help bridge some of that financing gap. Specifically, the central question asked in this project is whether Equity Crowdfunding can be a viable alternative, as an investment vehicle, for investors interested in Cleantech as well as a source of reliable funding for entrepreneurs. The United States provides the geographic focus of this research. From 2012, the US JOBS Act opened the privilege previously reserved to professional investors, such as venture capitalists, by allowing “non-accredited” investors to acquire equity shares in startups through licensed crowdfunding platforms. In terms of methodology, this capstone is based on a comparative analysis of the financial returns of three financial protagonists; Equity Crowdfunding, Cleantech-focused Venture Capital (VC) and diversified VC. Drawing on the pioneering work of Signori (2017) and Gaddy (2016), the results of this analysis show that, although Cleantech Equity Crowdfunding lags behind diversified VC, it has performed significantly better than Cleantech VC over the same investment horizon.
    [Show full text]
  • The World of Startup Valuations Magic, Mystery Or Craft?
    The World of Startup Valuations Magic, Mystery or Craft? AUGUST Valuation Investment Banking Restructuring Advisory Services 2019 Content 1 Foreword 2 Introduction to Start-ups 3 Growth Stages for a Start-up 4 Funding Stages for a Start-up 5 Valuation Methods for valuing Start-ups 5.1. Venture Capital Method 5.2. Berkus Method 5.3. Scorecard Method 5.4. Risk Factor Summation Method 5.5. First Chicago Method 5.6. Backsolve Method 6 Concluding Remarks The World of StartupValuation Valuations Methods – Magic, for ValuingMystery Start-ups or Craft? 02 FOREWORD The dotcom bubble of the 2000 was one of the most phenomenal disruption that took place in the history of equity markets. Also known as the internet bubble it was a surge in the prices of stocks in the U.S. primarily pertaining to Internet / Tech companies. This was supplemented by the bull market run around the same time which fueled the upsurge in prices. From 1994 to 2000 the equity stock of these so called “Internet-Based” Companies grew aggressively 5x-6x. Such exponential growth was driven by the sentimental estimates of analysts/investors that, internet would be the next big thing. Nevertheless, the internet did end up being a phenomenon. However the value expectation may have been slightly over-estimated. The entire episode led to the crashing of NASDAQ with an estimated loss of $ 5 trillion in Market Capitalization. The aftermath being NASDAQ taking 15 years to recover its all time high it once honed at the peak of the dotcom bubble which can be seen in the figure shown below:
    [Show full text]
  • Differentiated Diligence After
    Tech - Startup Investments Round Up Tracking the funding space in MENA Region and Turkey Q2 2021 KPMG in Qatar August 2021 home.kpmg/qa Introduction KPMG in Qatar welcomes you to the second edition of Tech – Startup Investments Round Up, where we bring you the quarterly highlights from the Technology and Startup funding space in the MENA Region and Turkey. Given the events of the past year, it would not have been surprising to see negative sentiment around startup performance and a drop in investor and founder confidence. However, this has not been the case. Gaining momentum from the first quarter, the second quarter of 2021 witnessed record level funding in the region, continuing the trend that was observed during the pre-pandemic period. Further, in this edition of the report, we dive into the growing technology and startup ecosystem in Qatar. Interestingly, Qatar is experiencing an accelerated growth in its tech- startup industry. The startup funding in Qatar has taken a significant stride of approximately 182 percent during H1 2021, closing the first half with 10 deals and a total funding amount of $31 million. This document also throws some light on valuation methods for startups as these cannot be valued in the same way as a traditional business. In this document, we have critically evaluated different methods of calculating a startup’s valuation and summarized the conceivable process and approaches. Indeed, calculating the true value of a startup is a challenging exercise and several factors need to be taken into consideration. We believe that the compiled information would be a valuable and informative read.
    [Show full text]
  • Startups Valuation: Approaches and Methods
    CHAMBER OF INDEPENDENT APPRAISERS IN BULGARIA, REGIONAL COLLEGE OF SOFIA CITY & SOFIA REGION FIRST BALKAN VALUATION CONFERENCE 19 – 21 June 2015, Sofia STARTUPS VALUATION: APPROACHES AND METHODS Rositsa Trichkova, CPA Nigokhos Kanaryan, PhD About Us Rositsa Trichkova, CPA has 25 years of experience in accounting, auditing, consulting and valuation. She is a member of the Managing Board of the Bulgarian Institute of Certified Public Accountants. Rositsa is certified appraiser of financial assets, enterprises and receivables, and real estate. Nigokhos Kanaryan, PhD has more than 10 years of experience in asset management and risk management. He is licensed investment consultant by Bulgarian Financial Supervision Commission. Nigokhos is assistant professor in the Department of Economics of New Bulgarian University. 2 Motivation 3 Growing Startup Ecosystem • Startup definition (wiki): – is a business in the form of a company, a partnership or temporary organization designed to search for a repeatable and scalable business model. – These companies, generally newly created, are in a phase of development and research for markets. – Due to this background, many consider startups to be only tech companies, but as technology is becoming a normal factor, the essence of startups has more to do with innovativeness, scalability and growth • We are in the beginning of the emergence of the startup ecosystem in Europe • Targets for growth are set & they are high • Horizon 2020 - the biggest EU research and innovation programme. €80 billion of funding
    [Show full text]
  • Methods of Valuing Investment Projects Used by Venture Capital
    PRACE NAUKOWE Uniwersytetu Ekonomicznego we Wrocławiu RESEARCH PAPERS of Wrocław University of Economics Nr 428 Wrocław Conference in Finance: Contemporary Trends and Challenges Publishing House of Wrocław University of Economics Wrocław 2016 Copy-editing: Marta Karaś Layout: Barbara Łopusiewicz Proof-reading: Barbara Cibis Typesetting: Małgorzata Czupryńska Cover design: Beata Dębska Information on submitting and reviewing papers is available on websites www.pracenaukowe.ue.wroc.pl www.wydawnictwo.ue.wroc.pl The publication is distributed under the Creative Commons Attribution 3.0 Attribution-NonCommercial-NoDerivs CC BY-NC-ND © Copyright by Wrocław University of Economics Wrocław 2016 ISSN 1899-3192 e- ISSN 2392-0041 ISBN 978-83-7695-583-4 The original version: printed Publication may be ordered in Publishing House Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu ul. Komandorska 118/120, 53-345 Wrocław tel./fax 71 36-80-602; e-mail: [email protected] www.ksiegarnia.ue.wroc.pl Printing: TOTEM Contents Introduction ..................................................................................................... 9 Andrzej Babiarz: Methods of valuing investment projects used by Venture Capital funds, financed from public funds / Metody wyceny projektów inwestycyjnych stosowane przez fundusze Venture Capital finansowane ze środków publicznych ............................................................................. 11 Magdalena Bywalec: Updating the value of mortgage collateral in Polish banks / Aktualizacja wartości zabezpieczenia
    [Show full text]
  • Revisiting Valuation Methods of Tech Companies: a Case
    REVISITING VALUATION METHODS OF TECH COMPANIES: A CASE STUDY OF TESLA By Dilshod Davronov Submitted to Central European University Department of Economics and Business In partial fulfilment of the requirements for the degree of Master of Art in Economic Policy in Global Markets Supervisor: professor Peter Szilagyi CEU eTD Collection Budapest, Hungary 2019 Executive Summary The share price of Tesla, Inc., the world’s all-electric vehicle manufacturer, has increased by roughly 19 times in value from its IPO on June 29, 2010 (with start price of $17 per share) to December 31, 2018 ($318). The purpose of this thesis is to estimate the value of the company’s stock as of December 31, 2018, determine if the market price is fairly valued and also figure out the main drivers of such value. In this thesis we analyse fundamental concepts of valuation and its importance. In addition, the key valuation methods and, their advantages and drawbacks are also discussed. The thesis moves on with the analysis of Tesla’s business profile and historical operational and financial performance, as well as its comparison to key peer group companies. The industry outlook and the market’s expectation on the future performance of Tesla are also reviewed through industry reports by international agencies and equity research papers issued by global investment banks and equity research firms. Based on our findings from the above-mentioned analyses we forecast the future cash flow of the company and carry out its valuation using three methods, followed by the discussions regarding validity of each method’s outcome.
    [Show full text]
  • Start-Up Valuation of Biotech Companies with Real Options
    START-UP VALUATION OF BIOTECH COMPANIES WITH REAL OPTIONS A case study of the start-up Organovo Holdings, Inc. Master Thesis HEC Paris Celine Göbel [email protected] June 2016 ©2016 Celine Göbel. All rights reserved. The author hereby grants to HEC Paris permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part in any medium now known or hereafter created. Patrick Legland (Thesis Supervisor) Affiliate Professor in Finance at HEC Paris Start-up Valuation of Biotech Companies with Real Options A case study of the start-up Organovo Holdings, Inc. written by Celine Göbel Abstract: This master thesis examines several valuations methods for young companies. Start-ups are generally characterised by negative earnings, pure equity financing and binary business models. Traditional valuation methods, such as the Discounted Cash Flow, valuation multiples or comparable transactions, cannot be applied due to start ups’ high degree of uncertainty, short histories, volatile discount rates and little publicly available data on financials, comparable companies or comparable transactions. Consequently, new valuation methods, e.g. the Venture Capital method, the First Chicago method, the Damodaran approach and Real Option valuation, will be presented and directly applied to the 3D bioprinting start- up Organovo. The new valuation methods take the uncertainty of start-ups into account and allow more flexibility regarding timing and investment decisions. On top of this, the valuation of intangible assets is shortly discussed, as it is especially important for start-ups with a strong intellectual property portfolio. This master thesis also highlights non-financials factors in valuation, since the personal skills and experience of the founder and management team can have a large impact on the start-up’s value.
    [Show full text]
  • Venture Capital and Private Equity Question Bank
    B.Com (Financial Markets) Semester VI Subject: Venture Capital and Private Equity Question Bank Sr. No. Question Answer1 Answer2 Answer3 Answer4 The private equity fund generally disposes of the investment within relative time frame of 3 1 Investment Negotiation Exit Deal structuring to 5 years from investment. What is this called as? 2 What is the risk of loss due to change in market prices called? Liquidity risk Credit risk Price risk Operating risk 3 ______fund structure is ideally set up in a tax efficient jurisdiction outside India. Domestic structure Co-investment Structure Unified Structure Offshore Fund Structure In ____________ fund structure the investments are pooled from domestic investors by Co-investment 4 Unified structure Onshore Structure Offshore Fund Structure setting up a domestic pooling vehicle. Structure 5 Which of the following are typically open ended and actively managed? Private equity Venture capital Hedge fund Investment In which structure two separate pools of capital for domestic investors and for offshore Offshore Fund 6 Unified structure Onshore Structure Co-investment Structure investors are created? Structure 7 Private equity investments are _____ stage investments. early mature no particular stage none of the above Under which fund structure, an investment vehicle in the form of a limited liability 8 company or limited liability partnership organized in an offshore tax favourable jurisdiction Unified structure Co-investment Structure Domestic Structure Offshore Fund Structure makes portfolio investments into Indian companies? 9 Venture Capital investments are _____ stage investments. early mature later no particular stage 10 ______ is a form of risk capital. Hedge fund Venture capital Private Equity None of the above Unlisted Equity 11 Private equity investments are made in ? Listed Equity Shares Only debt None of the above Shares Venture capital investments are usually made at _____ stage as compared to private 12 Later Earlier Expansion None of the above equity.
    [Show full text]
  • Six Degrees of Early-Stage Ventures
    Six degrees of early-stage ventures Marc Felske Darwin College University of Cambridge April 2020 This dissertation is submitted for the degree of Doctor of Philosophy I dedicate this thesis to my loving family... Declaration This dissertation is the result of my own work, except for commonly understood ideas or where specific references are made, and includes nothing which is the outcome of work done in collaboration. It is not substantially the same as any work that I have submitted, or, is being concurrently submitted for a degree or diploma or other qualification at the University of Cambridge or other University. The dissertation consists of 63273 words, and 36 figures. Therefore, it does not exceed the prescribed word limit of 65,000 words and 150 figures for the relevant Degree Committee of the Department of Engineering. Marc Felske Cambridge April 2020 i Abstract Six degrees of early stage ventures Marc Felske Private markets investment volume and valuations exceed the level of the dot-com bubble (PwC and CBInsights, 2019). The available amount of capital surges as investors announce new multi-billion dollar funds (Kruppa, 2019). Even large, insti- tutional funds in the Silicon Valley, who are used to investing in later stages, move upstream to invest in fledgling firms to achieve higher ownership and returns (Clark, 2019a)1. Despite the high private market liquidity2, standing out from the crowd is critical and has become more difficult to achieve, even for innovative entrepreneurs (Planko et al., 2017). Curiously, venture capitalists who expect the latest technology and innovation from new ventures, did not themselves significantly innovate in their approach, including methods of evaluating ventures (Kupor, 2019).
    [Show full text]