BUS 314 Lecture 7: BUS314 Session 7

102 views9 pages

Document Summary

If (cid:455)ou"(cid:396)e a(cid:374) i(cid:374)(cid:448)esto(cid:396) a(cid:374)d (cid:455)ou"(cid:396)e leadi(cid:374)g the i(cid:374)side (cid:396)ou(cid:374)d (cid:455)ou"(cid:396)e (cid:271)etti(cid:374)g agai(cid:374)st (cid:455)ou(cid:396)self: t(cid:455)pi(cid:272)all(cid:455), it"s the sa(cid:373)e deal as (cid:271)efo(cid:396)e, (cid:449)hi(cid:272)h is p(cid:396)ett(cid:455) diluted (cid:271)e(cid:272)ause it"s the same share as before. Investors want to put money into the business and not into the founders. O(cid:374)l(cid:455) ti(cid:373)e (cid:455)ou"ll i(cid:374)(cid:448)est i(cid:374) the fou(cid:374)de(cid:396)s is (cid:449)he(cid:374) the(cid:396)e"s a ha(cid:396)d ti(cid:373)e doi(cid:374)g a(cid:374) ipo a(cid:374)d the (cid:271)oa(cid:396)d de(cid:272)ides the fou(cid:374)de(cid:396)s (cid:374)eed so(cid:373)e li(cid:395)uidit(cid:455) (cid:449)hile the(cid:396)e"s also a(cid:374) i(cid:374)(cid:448)esto(cid:396) that would be a good shareholder. At this point the company is generating a good cash flow. X divided by 1-pe(cid:396)(cid:272)e(cid:374)tage that the i(cid:374)(cid:448)esto(cid:396)s a(cid:396)e getti(cid:374)g to fi(cid:374)d the (cid:862) ha(cid:396)e cou(cid:374)ts post. Optio(cid:374) pool is(cid:374)"t al(cid:449)a(cid:455)s allo(cid:272)ated (cid:396)ight a(cid:449)a(cid:455) (cid:271)e(cid:272)ause the pool is to gi(cid:448)e a(cid:374) i(cid:374)(cid:272)e(cid:374)ti(cid:448)e fo(cid:396) future growth. (cid:862)co(cid:374)(cid:448)e(cid:396)ti(cid:271)le de(cid:271)t(cid:863), (cid:373)ake loa(cid:374)s to the (cid:271)usi(cid:374)ess a(cid:374)d (cid:374)ot to you pe(cid:396)so(cid:374)ally. Use the whole fractional share when dividing, do(cid:374)"t (cid:396)ou(cid:374)d up the (cid:374)u(cid:373)(cid:271)e(cid:396)s.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents