UC 270 Lecture Notes - Lecture 15: Initial Public Offering, Startup Company, Cash Flow
Document Summary
Deal sourcing (network) deal screening due diligence investment portfolio company management. Incorporate new information and adjust the hypothesis. Vc firms have investment theses - address different sectors, stages, trends. Thesis: how the startup will create value and generate a target return. Protection of ideas, creations of the mind. Patents (useful, novel, non-obvious - 20 years) Burn rate is the amount of money that a startup company is losing, generally expressed per month. Monthly burn rate = (cash at year start - cash at year end) /12. Gross (total spent) or net (spent - revenue, and other income source) Runway is how long the company has before. Exit = liquidity event = investors get cash return. The cash-on-cash return is the ratio of annual before-tax cash flow to the total amount of cash invested, expressed as a percentage.
