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S trategy for S uc ces sN ational Bu s ine s s and Te ch nology C onfe re nceR ap h ae l WongVale ntin S taykovF rance s P...
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A genda 1   Executive Summary 2   Analysis 3   Implementation Strategy 4   Take-Away                               3
A gendaE xecutive S ummary                      4
Yahoo! can branch out to divers ify revenues byinves ting in C hines e s tart-ups                Yahoo! has not been able ...
Yahoo! needs to find a way to utilize its opportunitiesand res ources to competeDiversify Revenue        Competitors      ...
A gendaA nalys is             7
Mentors                                                            Jack Ma                                                ...
A partners hip with A libaba Group is es s ential to thes ucces s of the s tart-up accelerator in C hina    Partnership Te...
AssumptionsStake in Start-up            20%Investment per Start-up     $20KConvertible Note                               ...
Yahoo! can realize various benefits from theircontribution to the joint venture           Contribution                    ...
A gendaImplementationS trategy                 12
A fter one year, Yahoo! can launch the s tart-upac celerator program in C hina          Hire Jerry YangHigh         Create...
“I think that it’s always possible to have a great companyif you have a great idea.” – Jerry Yang                      14
A gendaA ppendix            15
Potential ris ks can be mitigated with carefulexecution.1    Alibaba does not accept the partnership     Increase incentiv...
Low     New Companies Total Companies          Investment per                           AverageYear    Invested       Inve...
Medium        New Companies Total Companies       Investment per                           AverageYear                    ...
High        New Companies Total Companies     Investment perYear                                                       Tot...
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NBTC

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  • Introduction Executive Summary Analysis - Dangers of Indoor Tanning - Demographics Recommendation & Implmentation - Overview - Contest - Supplementary Campaigns - Advocating to Provincial Government - Implmentation Timeline - Finances Risks & Mitigations Conclusion - Team to take this forward
  • Opportunity to diversify revenues by entering into a joint venture that will bring a return on investment of 95% in a market protected from major competitors like Google
  • Diversify revenues – 85% from search advertisements (largest) from 15% (declining) market share Alibaba Group – 43% share in company Chinese talent – 600,000 engineering graduates every year vs 70,000 in US
  • Transcript of "NBTC"

    1. 1. S trategy for S uc ces sN ational Bu s ine s s and Te ch nology C onfe re nceR ap h ae l WongVale ntin S taykovF rance s P olicarp ioD onny O u yang
    2. 2. 2
    3. 3. A genda 1 Executive Summary 2 Analysis 3 Implementation Strategy 4 Take-Away 3
    4. 4. A gendaE xecutive S ummary 4
    5. 5. Yahoo! can branch out to divers ify revenues byinves ting in C hines e s tart-ups Yahoo! has not been able to grow due to poor governance and Complication consistent dominance of competitor market share How can Yahoo! grow revenues against market giants? Assign Jerry Yang to lead a large-scale start-up accelerator for tech companies in China with the Alibaba Group 5
    6. 6. Yahoo! needs to find a way to utilize its opportunitiesand res ources to competeDiversify Revenue Competitors Alibaba Group Chinese Talent Omnipresence in Chinese talent pool Miniscule market industry requires Yahoo! interest in can be tapped into share forces Yahoo! Yahoo! to enter Alibaba Group gives by dominating theto source alternative markets that are access to Chinese start-up accelerator revenue restricted to its market market competitorsYahoo! can divers ify revenues by leveraging its competitive advantageof the C hines e market and es tablis hing a s tart-up accelerator divis ion 6
    7. 7. A gendaA nalys is 7
    8. 8. Mentors Jack Ma AlibabaCyril Ebersweiler Lu Yi Jerry Yang Joseph Chen CEO RenRen 3-month workspace, accelerator $20,000 investment (for 20% protected) Charles Chao $200,000 convertible notes CEO Sina.com Weekly dinners to learn Perks: hosting, legal, billing Access to international markets Li Ka-shing Access to top tech mentors in China Billionaire ‘Demo day’ to raise series A investment Bill Liao 8 Xing
    9. 9. A partners hip with A libaba Group is es s ential to thes ucces s of the s tart-up accelerator in C hina Partnership Terms with Alibaba Yahoo! • $13M in investment capital • $132M in convertible notes • Global brand Alibaba Group • Expertise via mentorship • Brand recognition in China • InfrastructureJ erry Yang will s pearhead the joint venture by rebuilding therelations hip with A libaba G roup 9
    10. 10. AssumptionsStake in Start-up 20%Investment per Start-up $20KConvertible Note Unrealized Realized per Start-up $200K Equity Interest Equity IncomeBad Debt 5% NPV ROI NPV ROIStake in Joint Venture 70% LowShare in Returns 14% $304.8M 66% $1.6M 17% (4% Exit; $7.5M Val)Share of Returns from Medium $580.9M 133% $9.0M 95% Interest in Alibaba 1.20% (5% Exit; $10M Val)Average Valuation of High $1.6B 482% $46M 486% Start-up after 5YRS $7.5M - $20M (7.5% Exit; $20M Val)Start-up Base Growth 50% /yrExits 4-7.5%Discount Rate 20% Yahoo! has the potential to earn 95% ROI in realized equity income in the next 5 years 10
    11. 11. Yahoo! can realize various benefits from theircontribution to the joint venture Contribution Benefits • Expected NPV of $580.9M in• Take on 70% stake in joint venture unrealized equity interestwith Alibaba Group • Expected ROI of 95% in realized• $13M in investment capital in the equity incomenext five years • Access to diversified revenues• $132M in convertible notes for • First priority to buy out start-upsstart-ups in the next 5yrs via acceleratorYahoo! will maximize s hareholder value by es tablis hing the s tart-upaccelerator with A libaba G roup in C hina 11
    12. 12. A gendaImplementationS trategy 12
    13. 13. A fter one year, Yahoo! can launch the s tart-upac celerator program in C hina Hire Jerry YangHigh Create legal parameters with Establish joint venture Phase 1 Alibaba Build mentor baseMedium Attract start-ups Screen ApplicantsLow Assessment 0-6 months 6-12 months 12-18 months 18 months + 13
    14. 14. “I think that it’s always possible to have a great companyif you have a great idea.” – Jerry Yang 14
    15. 15. A gendaA ppendix 15
    16. 16. Potential ris ks can be mitigated with carefulexecution.1 Alibaba does not accept the partnership Increase incentives available to Alibaba to partner with Yahoo! but in the scenario of a lost partnership, Yahoo! can partner with other start- up accelerators already present in China (Chinaccelerator, etc.)2 Jerry Yang is unable to lead the joint venture Yahoo! has a vast network of experienced executives that can lead the venture in Jerry Yang’s absence.3 Low supply of mentors in China Leverage Yahoo’s international brand to reach out to successful entrepreneurs across the globe to serve as mentors in China 16
    17. 17. Low New Companies Total Companies Investment per AverageYear Invested Invested Year Total Investment Valuation Total Valuation Yahoos Share 1 50 50 $ 1,000,000.00 $ 1,000,000.00 $ 7,500,000.00 $ 375,000,000.00 $ 52,500,000.00 2 75 125 $ 1,500,000.00 $ 2,500,000.00 $ 7,500,000.00 $ 937,500,000.00 $ 131,250,000.00 3 113 238 $ 2,250,000.00 $ 4,750,000.00 $ 7,500,000.00 $ 1,781,250,000.00 $ 249,375,000.00 4 169 406 $ 3,375,000.00 $ 8,125,000.00 $ 7,500,000.00 $ 3,046,875,000.00 $ 426,562,500.00 5 253 659 $ 5,062,500.00 $ 13,187,500.00 $ 7,500,000.00 $ 4,945,312,500.00 $ 692,343,750.00 Investment per Unrealized Disc UnrealizedYear Disc. Inv Per Year Opp Cost Disc Opp Cost Year Return Return 1 $ 1,000,000.00 $ 833,333.33 $ 155,500,000.00 $129,583,333.33 $ 52,500,000.00 $ 43,750,000.00 2 $ 1,500,000.00 $ 1,041,666.67 $ 153,750,000.00 $106,770,833.33 $ 131,250,000.00 $ 91,145,833.33 3 $ 2,250,000.00 $ 1,302,083.33 $ 151,125,000.00 $ 87,456,597.22 $ 249,375,000.00 $ 144,314,236.11 4 $ 3,375,000.00 $ 1,627,604.17 $ 147,187,500.00 $ 70,981,626.16 $ 426,562,500.00 $ 205,711,082.18 5 $ 5,062,500.00 $ 2,034,505.21 $ 141,281,250.00 $ 56,777,765.72 $ 692,343,750.00 $ 278,237,425.25 NPV ROITotal $ 6,839,192.71 $ 451,570,155.77 $ 763,158,576.87 $ 304,749,228.40 66% Investment per Expected Return Disc Expected Expected badYear Disc. Inv Per Year Disc Bad Debt Year Realized Return Realized Debt 1 $ 1,000,000.00 $ 833,333.33 2 $ 1,500,000.00 $ 1,041,666.67 3 $ 2,250,000.00 $ 1,302,083.33 4 $ 3,375,000.00 $ 1,627,604.17 5 $ 5,062,500.00 $ 2,034,505.21 $ 27,693,750.00 $ 11,129,497.01 $ 6,593,750.00 $ 2,649,880.24 NPV ROITotal $ 6,839,192.71 $ 1,640,424.06 17% 17
    18. 18. Medium New Companies Total Companies Investment per AverageYear Total Investment Total Valuation Yahoos Share Invested Invested Year Valuation 1 50 50 $ 1,000,000.00 $ 1,000,000.00 $ 10,000,000.00 $ 500,000,000.00 $ 70,000,000.00 2 75 125 $ 1,500,000.00 $ 2,500,000.00 $ 10,000,000.00 $ 1,250,000,000.00 $ 175,000,000.00 3 113 238 $ 2,250,000.00 $ 4,750,000.00 $ 10,000,000.00 $ 2,375,000,000.00 $ 332,500,000.00 4 169 406 $ 3,375,000.00 $ 8,125,000.00 $ 10,000,000.00 $ 4,062,500,000.00 $ 568,750,000.00 5 253 659 $ 5,062,500.00 $ 13,187,500.00 $ 10,000,000.00 $ 6,593,750,000.00 $ 923,125,000.00 Investment per Unrealized Disc UnrealizedYear Disc. Inv Per Year Opp Cost Disc Opp Cost Year Return Return 1 $ 1,000,000.00 $ 833,333.33 $ 154,000,000.00 $128,333,333.33 $ 70,000,000.00 $ 58,333,333.33 2 $ 1,500,000.00 $ 1,041,666.67 $ 150,000,000.00 $104,166,666.67 $ 175,000,000.00 $ 121,527,777.78 3 $ 2,250,000.00 $ 1,302,083.33 $ 144,000,000.00 $ 83,333,333.33 $ 332,500,000.00 $ 192,418,981.48 4 $ 3,375,000.00 $ 1,627,604.17 $ 135,000,000.00 $ 65,104,166.67 $ 568,750,000.00 $ 274,281,442.90 5 $ 5,062,500.00 $ 2,034,505.21 $ 121,500,000.00 $ 48,828,125.00 $ 923,125,000.00 $ 370,983,233.67 NPV ROITotal $ 6,839,192.71 $ 429,765,625.00 $ 1,017,544,769.16 $ 580,939,951.45 133% Investment per Expected Return Disc Expected Expected badYear Disc. Inv Per Year Disc Bad Debt Year Realized Return Realized Debt 1 $ 1,000,000.00 $ 833,333.33 2 $ 1,500,000.00 $ 1,041,666.67 3 $ 2,250,000.00 $ 1,302,083.33 4 $ 3,375,000.00 $ 1,627,604.17 5 $ 5,062,500.00 $ 2,034,505.21 $ 46,156,250.00 $ 18,549,161.68 $ 6,593,750.00 $ 2,649,880.24 NPV ROITotal $ 6,839,192.71 $ 9,060,088.73 95% 18
    19. 19. High New Companies Total Companies Investment perYear Total Investment Average Valuation Total Valuation Yahoos Share Invested Invested Year 1 50 50 $ 1,000,000.00 $ 1,000,000.00 $ 20,000,000.00 $ 1,000,000,000.00 $ 140,000,000.00 2 75 125 $ 1,500,000.00 $ 2,500,000.00 $ 20,000,000.00 $ 2,500,000,000.00 $ 350,000,000.00 3 113 238 $ 2,250,000.00 $ 4,750,000.00 $ 20,000,000.00 $ 4,750,000,000.00 $ 665,000,000.00 4 169 406 $ 3,375,000.00 $ 8,125,000.00 $ 20,000,000.00 $ 8,125,000,000.00 $ 1,137,500,000.00 5 253 659 $ 5,062,500.00 $ 13,187,500.00 $ 20,000,000.00 $ 13,187,500,000.00 $ 1,846,250,000.00 Investment per Disc UnrealizedYear Disc. Inv Per Year Opp Cost Disc Opp Cost Unrealized Return Year Return 1 $ 1,000,000.00 $ 833,333.33 $ 148,000,000.00 $123,333,333.33 $ 140,000,000.00 $ 116,666,666.67 2 $ 1,500,000.00 $ 1,041,666.67 $ 135,000,000.00 $ 93,750,000.00 $ 350,000,000.00 $ 243,055,555.56 3 $ 2,250,000.00 $ 1,302,083.33 $ 115,500,000.00 $ 66,840,277.78 $ 665,000,000.00 $ 384,837,962.96 4 $ 3,375,000.00 $ 1,627,604.17 $ 86,250,000.00 $ 41,594,328.70 $ 1,137,500,000.00 $ 548,562,885.80 5 $ 5,062,500.00 $ 2,034,505.21 $ 42,375,000.00 $ 17,029,562.11 $ 1,846,250,000.00 $ 741,966,467.34 NPV ROITotal $ 6,839,192.71 $342,547,501.93 $ 2,035,089,538.32 $ 1,685,702,843.69 482% Investment per Expected Return Disc ExpectedYear Disc. Inv Per Year Expected bad Debt Disc Bad Debt Year Realized Return Realized 1 $ 1,000,000.00 $ 833,333.33 2 $ 1,500,000.00 $ 1,041,666.67 3 $ 2,250,000.00 $ 1,302,083.33 4 $ 3,375,000.00 $ 1,627,604.17 5 $ 5,062,500.00 $ 2,034,505.21 $ 138,468,750.00 $ 55,647,485.05 $ 6,593,750.00 $ 2,649,880.24 NPV ROITotal $ 6,839,192.71 $ 46,158,412.10 486% 19

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