Lecture 5: Founders & Economics | Adv. Venture Capital-FINAN 6310 | Chad Jardine, University of Utah, 2008–

3. Advanced Venture Capital: FINAN 6310 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Is the Founder Worthy? Premoney vs. postmoney P/E to PEG ratio The Founder’s Dilemma Agenda Smith’s 3 Economic Drivers Gold and Reserves U.S. Monetary Policy Money Supply and Inflation

6. Venture Capital: Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Valuation Factors Bet on the jockey, not the horse

7. Venture Capital: Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Strategy vs Execution ‘A’ execution of a ‘C’ strategy beats a ‘C’ execution of an ‘A’ strategy every time. Can the founder execute?

8. Venture Capital: Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. “What do you believe which is true, that nobody agrees with?” —Peter Thiel Cofounder and former CEO of Paypal. Author of Zero to One Photo Credit: Forbes Are you a fanatic?

11. Venture Capital: Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Photo Credit: Business Insider “The best way to predict the future is to create it.” —Peter Drucker Author & Management Consultant

12. Venture Capital: Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Can you recruit ‘originals’? —Adam Grant Professor, Wharton Business School Author of Give and Take & Originals

15. Innovation is saying no to 1,000 things

18. Advanced Venture Capital: FINAN 6310 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Is the Founder Worthy? Premoney vs. postmoney P/E to PEG ratio The Founder’s Dilemma Agenda ✓ Smith’s 3 Economic Drivers Gold and Reserves U.S. Monetary Policy Money Supply and Inflation

19. Venture Capital: Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Hedges and Preferred Stock Preferred stock is a contract

21. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Premoney & Postmoney Valuations Premoney = value at new price before investment Postmoney = value at new price after investment

22. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Premoney & Postmoney Valuations Series A Series B Investment $2,000,000 New Shares 1,000,000 Price per Share $2.00 Total Shares After Closing 2,500,000 Premoney ? Postmoney ?

23. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Premoney & Postmoney Valuations Series A Series B Investment $2,000,000 New Shares 1,000,000 Price per Share $2.00 Total Shares After Closing 2,500,000 Premoney $3,000,000 Postmoney $5,000,000

24. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Premoney & Postmoney Valuations Series A Series B Investment $2,000,000 $5,000,000 New Shares 1,000,000 1,250,000 Price per Share $2.00 $4.00 Total Shares After Closing 2,500,000 3,750,000 Premoney $3,000,000 Postmoney $5,000,000

25. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Premoney & Postmoney Valuations Series A Series B Investment $2,000,000 $5,000,000 New Shares 1,000,000 1,250,000 Price per Share $2.00 $4.00 Total Shares After Closing 2,500,000 3,750,000 Premoney $3,000,000 $10,000,000 Postmoney $5,000,000 $15,000,000

26. Advanced Venture Capital: FINAN 6310 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Is the Founder Worthy? Premoney vs. postmoney P/E to PEG ratio The Founder’s Dilemma Agenda ✓ ✓ Smith’s 3 Economic Drivers Gold and Reserves U.S. Monetary Policy Money Supply and Inflation

27. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. P/E Ratio Price to Earnings Ratio (P/E Ratio) Price per Share (PPS) ÷ Earnings per Share (EPS)

30. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Deep Dive Employees 3,600 3,529 Revenues $1.17 B $1.59 B

31. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Deep Dive Employees 3,600 3,529 Revenues $1.17 B $1.59 B Earnings (Profit) -$964 M $950 M

32. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Deep Dive Employees 3,600 3,529 Revenues $1.17 B $1.59 B Earnings (Profit) -$964 M $950 M EPS -$1.79 $0.41

33. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Deep Dive Employees 3,600 3,529 Revenues $1.17 B $1.59 B Earnings (Profit) -$964 M $950 M EPS -$1.79 $0.41 P/E N/A 32.1

34. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Deep Dive Why? Employees 3,600 3,529 Revenues $1.17 B $1.59 B Earnings (Profit) -$964 M $950 M EPS -$1.79 $0.41 P/E N/A 32.1 Market Cap $22 B $2 B

35. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Deep Dive P/E Ratio, DCF, NPV How much will they earn in the future?

38. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Growth Rate = Year Over Year % Growth in Earnings 41% Compound Annual Growth Rate (CAGR) = Doubling of PPS over 2 Years P/E Ratio

39. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. P/E Ratio P/E Ratios above 40% are considered unsustainable

40. The 40% Rule Is the Company Worthy Profit margin + Growth Rate should be >40% for software companies https://feld.com/archives/2015/02/rule-40-healthy-saas-company.html

41. Is the Company Worthy http://tomtunguz.com/rule-of-40/ The 40% Rule really only applies after companies reach $50M +

42. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Earnings Projections for NewCo YEAR One Two Three Four Five Earnings per Share (EPS) $1.00 $1.75 $2.50 $3.25 $4.00 Est. Growth Rate (CAGR) NA 75% 43% 30% 23% Estimated Price/Earnings (P/E) Ratio 20 40 40 30 23 Price per Share (Low) $13 $35 $50 $65 $80 Price per Share (High) $20 $70 $100 $97.5 $91 Post IPO: When Should You Sell Your Stock?

43. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. P/E Ratio / Earnings Growth Rate = PEG Ratio Does P/E match Growth Rate? P/E ÷ Growth Rate = PEG Ratio (PEG Ratio of 1 = “Fair Value”) Growth Rate 53% 91% 75% 40% 35% 20% P/E Ra7o 40 40 40 40 35 20

44. Advanced Venture Capital: FINAN 6310 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Is the Founder Worthy? Premoney vs. postmoney P/E to PEG ratio The Founder’s Dilemma Agenda ✓ ✓ ✓ Smith’s 3 Economic Drivers Gold and Reserves U.S. Monetary Policy Money Supply and Inflation

47. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. The Founder’s Dilemma Only 25% of founders are still CEO at the company’s IPO.

48. Venture Capital: Financing New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. The Founder’s Dilemma “Most entrepreneurs want to make a lot of money and to run the show. New research shows that it’s tough to do both. If you don’t figure out which matters more to you, you could end up [doing neither].”

50. Advanced Venture Capital: FINAN 6310 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Is the Founder Worthy? Premoney vs. postmoney P/E to PEG ratio The Founder’s Dilemma Agenda ✓ ✓ ✓ ✓ Smith’s 3 Economic Drivers Gold and Reserves U.S. Monetary Policy Money Supply and Inflation

51. Venture Capital: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Course Context & Objectives NewCo Company How do I make my startup attractive and fund it? Investor Understanding the psychology and needs of potential investors. Context Understanding the playing field and the rules for funding your venture. Deal What goes into a successful deal: terms and valuation.

52. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Photo Credit: http://i.ytimg.com/ “We cannot opt out of economic issues and decisions. Our only options are to be informed, uninformed, or misinformed…” —Thomas Sowell Professor of Economics Hoover Institution, Stanford University Author of Basic Economics

53. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Father of Economics Adam Smith 1720–1790 An Inquiry into the Nature and Causes of the Wealth of Nations Pub. 1776 Photo Credit: Creative Commons, Wikipedia: Adam Smith

54. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Father of Economics Wealth can be created. Transactions create wealth.

55. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Transactions Build Wealth For example Avg. Satisfaction 5.0

56. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. For example Avg. Satisfaction 8.0 Transactions Build Wealth

57. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Father of Economics Freedom, Justice, Competition How much? Free market economics The invisible hand.

58. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Transactions Build Wealth Each transaction increases value

62. Advanced Venture Capital: FINAN 6310 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Is the Founder Worthy? Premoney vs. postmoney P/E to PEG ratio The Founder’s Dilemma Agenda ✓ ✓ ✓ ✓ Smith’s 3 Economic Drivers Gold and Reserves U.S. Monetary Policy Money Supply and Inflation ✓

63. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Gold Standard The Gold Standard—Hard Assets to Back Currency

64. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. < 1900 Gold is the basis for international trade. A de facto gold standard exists. The Birth of Our Financial System

65. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1913 Federal Reserve created to stabilize the price of gold, currency and inflation. < 1900 Gold is the basis for international trade. A de facto gold standard exists. The Birth of Our Financial System

66. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1913 Federal Reserve created to stabilize the price of gold, currency and inflation. < 1900 Gold is the basis for international trade. A de facto gold standard exists. 1914 The gold standard is dropped for the duration of WWI The Birth of Our Financial System

67. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1920s–30s The rise of John Maynard Keynes 1883–1946 The Birth of Our Financial System Photo Credit: http://georgiapoliticalreview.com/in-the-long-run-keynes-is-dead/

68. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1920s–30s The rise of John Maynard Keynes 1883–1946 The Birth of Our Financial System The Paradox of Thrift Photo Credit: http://georgiapoliticalreview.com/in-the-long-run-keynes-is-dead/

69. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1920s–30s The rise of John Maynard Keynes 1883–1946 The Birth of Our Financial System Deficit Spending or “Stimulus” Affect change from the “Demand Side” Photo Credit: http://georgiapoliticalreview.com/in-the-long-run-keynes-is-dead/

70. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1920s–30s The rise of economist John Maynard Keynes 1883–1946 The Birth of Our Financial System 1914 The gold standard is dropped for the duration of WWI 1929 Crash and the Great Depression rock faith in free markets. Photo Credit: Dorothea Lange—Florence Owens Thompson, 32, a destitute pea picker and mother of 7, Nipomo, CA Mar 1936. Public Domain

71. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Photo Credit: history.com U.S. Presidents 1932 Franklin D. Roosevelt 1882–1945 elected The Birth of Our Financial System Loss of faith in banks and currency. A run on gold redemptions.

72. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1932 Franklin D. Roosevelt 1882–1945 elected The Birth of Our Financial System FDR closes banks, requires gold to be sent to the Federal Reserve. Calls for Americans to turn in gold for dollars. Photo Credit: history.com U.S. Presidents

73. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1932 Franklin D. Roosevelt 1882–1945 elected The Birth of Our Financial System The export of gold is illegal and gold reserves are stockpiled at Fort Knox. Photo Credit: history.com U.S. Presidents

75. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1932 Franklin D. Roosevelt 1882–1945 elected The Birth of Our Financial System Securities acts introduced as part of the New Deal. 1933–34 1933 Securities Act 1934 Securities & Exchange Act Photo Credit: history.com U.S. Presidents

76. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. The Birth of Our Financial System Keynes sends a copy of The Multiplier Effect to FDR and wins respect for his ideas. Photo Credit: http://georgiapoliticalreview.com/in-the-long-run-keynes-is-dead/ 1933

77. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1932 Franklin D. Roosevelt 1882–1945 elected The Birth of Our Financial System 1934 Gold Reserve Act: private ownership of gold requires a license and U.S. can pay its debts in gold. 1933–34 1933 Securities Act 1934 Securities & Exchange Act Photo Credit: history.com U.S. Presidents

78. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Harry Dexter White Rises through U.S. Treasurey

79. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1941 The U.S. enters WWII The Birth of Our Financial System 1933–34 1933 Securities Act 1934 Securities & Exchange Act 1932 Franklin D. Roosevelt 1882–1945 elected

80. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. White placed in charge of all international economic analysis

83. Keynes represents the UK. White represents the U.S.

84. Key outcomes • Agree to more open and free trade • The creation of the IBDR precursor to the World Bank • The creation of the IMF

85. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. The Birth of Our Financial System Keynes proposes a new currency, the Bancor to foster currency exchanges between countries Photo Credit: http://georgiapoliticalreview.com/in-the-long-run-keynes-is-dead/ The IMF

86. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. White proposes the U.S. dollar, backed by gold… And says the U.S. rejects the Bancor.

87. Keynes was the world’s most famous economist. White represented the world’s greatest economic power.

88. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. White wins the day. But was he a spy? 1892–1948

89. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1944 Bretton-Woods The Birth of Our Financial System International currencies tied to U.S. dollar tied to gold. Keynes dies 1946 but retains the fame. 1941 The U.S. enters WWII Photo Credit: http://georgiapoliticalreview.com/in-the-long-run-keynes-is-dead/

90. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. 1944 Bretton-Woods The Birth of Our Financial System 1941 The U.S. enters WWII Keynesian Economics is U.S. Policy for nearly 50 years (until Jimmy Carter in 1979) Photo Credit: http://georgiapoliticalreview.com/in-the-long-run-keynes-is-dead/

91. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Historical Context 1973 Richard M. Nixon 1913–1994 ends the gold standard 1944 Bretton-Woods 1941 The U.S. enters WWII Photo Credit: U.S. National Archives and Records Administration U.S. Dollar becomes a fiat, as do the world’s reserves.

92. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Historical Context 1973 Richard M. Nixon 1913–1994 ends the gold standard 1944 Bretton-Woods 1941 The U.S. enters WWII Photo Credit: U.S. National Archives and Records Administration The Bretton Woods rules go away, but not the structure of the U.S. Dollar as a reserve currency

93. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Supply and Demand Price Volume/Quantity S-1 D-1 Q-1 P-1

94. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Supply and Demand Price Volume/Quantity S-1 D-1 Q-1 P-1 P-2 Q-2 Impact of supply growth S-2

95. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Supply and Demand Price Volume/Quantity S-1 D-1 Q-1 P-1 D-2 P-2 Q-2 Impact of demand growth

96. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Friedrich Hayek Photo Credit: http://wochederfreiheit.org 1974 Nobel prize in economics Price communicates everything without need for else. Friedrich Hayek 1899–1992

97. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Friedrich Hayek Photo Credit: http://wochederfreiheit.org So-called Austrian School because of Hayek’s nationality Friedrich Hayek 1899–1992

98. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Milton Friedman Another crisis hits, this time shaking faith in followers of Keynes.

99. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Milton Friedman Photo Credit: http://dailyplunge.com/ Former Keynes disciple Chicago School of Economics Milton Friedman 1912–2006

100. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Milton Friedman Photo Credit: http://dailyplunge.com/ Abandons Keynes ideas and establishes Monetarism Supply side economics Milton Friedman 1912–2006

101. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Milton Friedman Photo Credit: http://dailyplunge.com/ Official policy from 1979 to 2007 Reagan & Thatcher Milton Friedman 1912–2006

102. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Milton Friedman Photo Credit: http://dailyplunge.com/ Unprecedented growth and stability Income inequality grows Milton Friedman 1912–2006

103. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Back to Keynes Back to Keynes with the Bush stimulus in 2008 and subsequent Obama stimulus

105. Advanced Venture Capital: FINAN 6310 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Is the Founder Worthy? Premoney vs. postmoney P/E to PEG ratio The Founder’s Dilemma Agenda ✓ ✓ ✓ ✓ Smith’s 3 Economic Drivers Gold and Reserves U.S. Monetary Policy Money Supply and Inflation ✓ ✓ ✓

106. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Inflation What is Money Supply? Source: http://www.federalreserve.gov/faqs/money_12845.htm https://wetheeconomy.com/films/that-film-about-money/?autoplay=yes https://wetheeconomy.com/films/that-second-film-about-money/?autoplay=yes

107. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Inflation Inflation: Money Supply Exceeds GDP

108. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Inflation What is Money Supply? M0/MB: Notes & coins Source: http://www.federalreserve.gov/faqs/money_12845.htm M1: Demand Deposits M2: Savings & Time Deposits M3: Long Term No longer tracked by Fed as of 11/10/05 http://www.federalreserve.gov/releases/h6/current/

111. Venture Capital Financing for New Ventures: FINAN 6300 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Gold Standard ? Money supply limited by gold

113. Advanced Venture Capital: FINAN 6310 Course copyright © Chad Jardine. Images, works cited, etc. are copyright © their respective owners. Is the Founder Worthy? Premoney vs. postmoney P/E to PEG ratio The Founder’s Dilemma Agenda ✓ ✓ ✓ ✓ Smith’s 3 Economic Drivers Gold and Reserves U.S. Monetary Policy Money Supply and Inflation ✓ ✓ ✓ ✓

Lecture 5: Founders & Economics | Adv. Venture Capital-FINAN 6310 | Chad Jardine, University of Utah, 2008–

Lecture 5: Founders & Economics | Adv. Venture Capital-FINAN 6310 | Chad Jardine, University of Utah, 2008–

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Lecture 5: Founders & Economics | Adv. Venture Capital-FINAN 6310 | Chad Jardine, University of Utah, 2008–