BU121 Study Guide - Final Guide: Discounted Cash Flow, Blue Ocean Strategy, Operating Cash Flow
Document Summary
Venture life cycle: development- feasibility stage- from idea to business- prototype, trial. Seed financing: comes from your own pocket and family and friends- gives you money to develop: startup. Startup financing: your/family money + angel investors and venture capitalists: survival- revenues pay some but not all expenses- borrow or give up equity (equity is more popular) Mezzanine financing- (cid:862)de(cid:271)t (cid:449)ith a(cid:374) e(cid:395)uity ki(cid:272)ke(cid:396)(cid:863)- someone wants to invest but they are still a bit uncomfortable- they want the opportunity to change their debt into equity. Second-round financing- funds raised to finance expansion. Liquidity stage financing: early-maturity- growth slows, most value realized- consider exit (investor might leave, and so might the entrepreneur) Income approach methods: discounted cash flow, dete(cid:396)(cid:373)i(cid:374)e (cid:862)f(cid:396)ee(cid:863) (cid:272)ash flo(cid:449)s. = operating cash flow capital expenditures. Exit value= how much your company is worth in future. Exit multiple= factor that multiplies revenues to get exit factor. Post (cid:373)o(cid:374)ey (cid:448)aluatio(cid:374)= today(cid:859)s (cid:448)aluatio(cid:374) investment by vc.
