What does it mean that a firm is “Burning Cash”; and how does burning cash relate to the need for external funding in a start-up business?
Author: chris
.Describe possible explanations for an investor’s decision to convert preferred stock to common stock in connection with a liquidation event for a venture
Finance Questions in 2 hours
1.Name and explain two different types of risks especially relevant to early stage high-potential ventures.
2.Please explain the compensation structure of VC and PE firms.
3.Describe possible explanations for an investor’s decision to convert preferred stock to common stock in connection with a liquidation event for a venture
4.Describe the shortcomings/limitations of the Venture Opportunity Screening (VOS) Model discussed in class.
Finance Questions in 2 hours
1.Name and explain two different types of risks especially relevant to early stage high-potential ventures.
2.Please explain the compensation structure of VC and PE firms.
3.Describe possible explanations for an investor’s decision to convert preferred stock to common stock in connection with a liquidation event for a venture
4.Describe the shortcomings/limitations of the Venture Opportunity Screening (VOS) Model discussed in class. How did we say the Model could be modified (adapted) to make it more useful to entrepreneurs and prospective investors? Remember that many of the comments also apply to the other screening models (New venture template & VOSE)
5.What does it mean that a firm is “Burning Cash”; and how does burning cash relate to the need for external funding in a start-up business?
Remember that many of the comments also apply to the other screening models (New venture template & VOSE)
5.What does it mean that a firm is “Burning Cash”; and how does burning cash relate to the need for external funding in a start-up business?
Describe the shortcomings/limitations of the Venture Opportunity Screening (VOS) Model discussed in class.
Finance Questions in 2 hours
1.Name and explain two different types of risks especially relevant to early stage high-potential ventures.
2.Please explain the compensation structure of VC and PE firms.
3.Describe possible explanations for an investor’s decision to convert preferred stock to common stock in connection with a liquidation event for a venture
4.Describe the shortcomings/limitations of the Venture Opportunity Screening (VOS) Model discussed in class. How did we say the Model could be modified (adapted) to make it more useful to entrepreneurs and prospective investors? Remember that many of the comments also apply to the other screening models (New venture template & VOSE)
5.What does it mean that a firm is “Burning Cash”; and how does burning cash relate to the need for external funding in a start-up business?
.Describe possible explanations for an investor’s decision to convert preferred stock to common stock in connection with a liquidation event for a venture
Finance Questions in 2 hours
1.Name and explain two different types of risks especially relevant to early stage high-potential ventures.
2.Please explain the compensation structure of VC and PE firms.
3.Describe possible explanations for an investor’s decision to convert preferred stock to common stock in connection with a liquidation event for a venture
4.Describe the shortcomings/limitations of the Venture Opportunity Screening (VOS) Model discussed in class. How did we say the Model could be modified (adapted) to make it more useful to entrepreneurs and prospective investors? Remember that many of the comments also apply to the other screening models (New venture template & VOSE)
5.What does it mean that a firm is “Burning Cash”; and how does burning cash relate to the need for external funding in a start-up business?
Please explain the compensation structure of VC and PE firms.
Finance Questions in 2 hours
1.Name and explain two different types of risks especially relevant to early stage high-potential ventures.
2.Please explain the compensation structure of VC and PE firms.
3.Describe possible explanations for an investor’s decision to convert preferred stock to common stock in connection with a liquidation event for a venture
4.Describe the shortcomings/limitations of the Venture Opportunity Screening (VOS) Model discussed in class. How did we say the Model could be modified (adapted) to make it more useful to entrepreneurs and prospective investors? Remember that many of the comments also apply to the other screening models (New venture template & VOSE)
5.What does it mean that a firm is “Burning Cash”; and how does burning cash relate to the need for external funding in a start-up business?
Name and explain two different types of risks especially relevant to early stage high-potential ventures.
Finance Questions in 2 hours
1.Name and explain two different types of risks especially relevant to early stage high-potential ventures.
2.Please explain the compensation structure of VC and PE firms.
3.Describe possible explanations for an investor’s decision to convert preferred stock to common stock in connection with a liquidation event for a venture
4.Describe the shortcomings/limitations of the Venture Opportunity Screening (VOS) Model discussed in class. How did we say the Model could be modified (adapted) to make it more useful to entrepreneurs and prospective investors? Remember that many of the comments also apply to the other screening models (New venture template & VOSE)
5.What does it mean that a firm is “Burning Cash”; and how does burning cash relate to the need for external funding in a start-up business?
How much of the company will Marty have to give up to raise $10 million and will he do the deal?
| 4 | $ 11,000,000 |
- What imputed rate of return demanded by the investor? (3)
- Given that required rate of return, what value would the VCs probably give to projected Discreet Period pro forma CFs? (3)
- What is the firm’s Terminal Value (TV)? (2)
- What is the Present Value of the firm? (2)
- At that valuation; How much of the company will Marty have to give up to raise $10 million and will he do the deal?
7.
What is the Present Value of the firm?
| 4 | $ 11,000,000 |
- What imputed rate of return demanded by the investor? (3)
- Given that required rate of return, what value would the VCs probably give to projected Discreet Period pro forma CFs? (3)
- What is the firm’s Terminal Value (TV)? (2)
- What is the Present Value of the firm? (2)
- At that valuation; how much of the company will Marty have to give up to raise $10 million and will he do the deal?
7.
What is the firm’s Terminal Value (TV)?
| 4 | $ 11,000,000 |
- What imputed rate of return demanded by the investor? (3)
- Given that required rate of return, what value would the VCs probably give to projected Discreet Period pro forma CFs? (3)
- What is the firm’s Terminal Value (TV)? (2)
- What is the Present Value of the firm? (2)
- At that valuation; how much of the company will Marty have to give up to raise $10 million and will he do the deal?
7.
Your start-up company has been funded as follows:
What imputed rate of return demanded by the investor?
| 4 | $ 11,000,000 |
- What imputed rate of return demanded by the investor? (3)
- Given that required rate of return, what value would the VCs probably give to projected Discreet Period pro forma CFs? (3)
- What is the firm’s Terminal Value (TV)? (2)
- What is the Present Value of the firm? (2)
- At that valuation; how much of the company will Marty have to give up to raise $10 million and will he do the deal?
7.
Your start-up company has been funded as follows: