Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Tetuan                             alleyStartup School Fall 2011This is the Land of Do-as-you-please-and-take-what-you-wan...
Sponsors   Collaborators
Finance	  for	  Entrepreneurs	    Objec3ve	                                                                 Session	  1	  ...
TIME	  VALUE	  OF	  MONEY	                 Effect	  of	  compound	  interest              	                    =	  “A	  bir...
DIVERSIFICATION	                  Market	  vs.	  Company	  Risk              	           “Don´t	  put	  all	  your	  eggs	...
PRICE	  OF	  RISK	                Correla;on	  of	  Risk	  &	  Return	          	            “There´s	  no	  such	  thing	...
IN	  GRAPHS	                                                        Effect	  of	  compound	  Time	  value	  of	  money	    ...
STATEMENTS	  OF	  ANY	  COMPANY	                                             BALANCE	  SHEET	  11/3/11	  
RELATIONSHIP	  BETWEEN	                      ACCOUNTS	  11/3/11	  
Company	  with	  increasing	  profits	  11/3/11	                                                   10	  
But	  if	  the	  same	  company	  sells	  with	  a	  difference	  of	  payments	  above	  5	  months	                      ...
PROFIT	  AND	  LOSS	                Earnings	         -­‐	   COGS	                Contribu3on	  Margin	  	         -­‐	   ...
CASH	  FLOW	  STATEMENT	                Collec;bles	      -­‐	     Payments	  (Direct	  /	  Overhead)	                Oper...
BALANCE	  SHEET	  Ac3ve	  à	  where	  is	  my	  money	                      Passive	  à	  where	  does	  it	  come	  fro...
1	  M	  Tshirt+	  	  94	  M	  EUR	                                    1st	  liga	                                 VS	   Pr...
FCF:	  what	  is	  it?	                                         l         CAPM:	  r%	  =	  α	  +	  βp	  =	  Rf	  +(β*MRP)...
WHO	  IS	  WHO	                                               SICAVs	                                       Family	  offices...
HOW	  PLAYERS	  INVEST	                    Friends	                      and	                                             ...
INVESTMENT	  STAGES	  11/3/11	  
THE	  CHASM	  
INVESTMENT	  CRITERIA	                                  Why	  they	  Invest	      What	  they	  Measure	                  ...
DESIRED	  RETURN	                Target	  yearly	     Holding	  period	     Investment	         Entry/exit	               ...
ORIGIN	  OF	  MULTIPLIERS-­‐LEVERS	                                                          Shareholder	  Return	        ...
CONCLUSION	                            1	  /	  (1-­‐n)	  Source: http://www.paulgraham.com/equity.html   11/3/11	  
Upcoming SlideShare
Loading in …5
×

Tetuan Valley Startup School V - Fall 2011 - Week 3

689 views

Published on

Tetuan Valley Startup School V - Fall 2011 - Week 3

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

Tetuan Valley Startup School V - Fall 2011 - Week 3

  1. 1. Tetuan alleyStartup School Fall 2011This is the Land of Do-as-you-please-and-take-what-you-want Week  3   Tetuan Valley, October 2011
  2. 2. Sponsors Collaborators
  3. 3. Finance  for  Entrepreneurs   Objec3ve   Session  1     •  Concepts   Introduce    students  with  tehcnological   •  Principals   backgrounds  to  key  financial  concepts   •  Equa;ons   that  are  esen;al  at  the  hour  of  star;ng  a   business   •  Investors;  Objec;ves  and  restric;ons,  stages,  “Venture  Capital”  and   Value  Levers     •  Conclusions    for  the  entpreneur   Result     • Comprehension  of    key  financial   indicators   Session  2   • Ability  to  parameterize  the  models   •  Business  Plan   given  the  face  value  of  a  startup  and    to   •  Price   make  financial    projec;ons  to  investors   •  Business  Model     •  Other  tools     Dura3on     2  sessions,  4hr           11/3/11  
  4. 4. TIME  VALUE  OF  MONEY   Effect  of  compound  interest   =  “A  bird  in  the  hand  is  worth  two  in  the  bush”  11/3/11   4  
  5. 5. DIVERSIFICATION   Market  vs.  Company  Risk   “Don´t  put  all  your  eggs  in  one  basket”  11/3/11   5  
  6. 6. PRICE  OF  RISK   Correla;on  of  Risk  &  Return     “There´s  no  such  thing  as  a  free  lunch”  11/3/11   6  
  7. 7. IN  GRAPHS   Effect  of  compound  Time  value  of  money   interest   “A  bird  in  the  hand  is  worth   two  in  the  bush”   Market  vs.  Company  Risk   Diversifica3on   “Don´t  put  all  your  eggs  in  one   basket”   Correla;on  of  risk  &  return   Price  of  risk   “There´s  no  such  thing  as  a  free   (Sharpe  ra3o)   lunch”     11/3/11  
  8. 8. STATEMENTS  OF  ANY  COMPANY   BALANCE  SHEET  11/3/11  
  9. 9. RELATIONSHIP  BETWEEN   ACCOUNTS  11/3/11  
  10. 10. Company  with  increasing  profits  11/3/11   10  
  11. 11. But  if  the  same  company  sells  with  a  difference  of  payments  above  5  months   the  company  can  go  bankrupt   700 600 500 400 Margin   Margen 300 Collec;ons   Cobros 200 Pagos Payments   Caja 100 Cash  balance   0 -­‐100 Year  1 Year  2 Year  3 Year  4 11/3/11   11  
  12. 12. PROFIT  AND  LOSS   Earnings   -­‐   COGS   Contribu3on  Margin     -­‐   Overhead  Expenses   EBITDA   -­‐   Deprecia;ons  and  amor;za;ons   EBIT   +   Financial  result     EBT   -­‐   Taxes   Net  Result  11/3/11  
  13. 13. CASH  FLOW  STATEMENT   Collec;bles   -­‐   Payments  (Direct  /  Overhead)   Opera3ng  Cash   Capital  Subscrip;ons   +   New  Debt   -­‐   Principal  of  debt   -­‐   Dividends   Financial  Cash   -­‐   Investments   +   Temporary  financial  earnings   Investment  Cash   Annual  Cash  Balance  11/3/11   13  
  14. 14. BALANCE  SHEET  Ac3ve  à  where  is  my  money   Passive  à  where  does  it  come  from   Long-­‐Term  Assets   Tangible  Equity   Social  Capital   Investments   Net  Results   Deprecia3ons   Earnings   Long-­‐Term  Outside   Capital   Banks   Short-­‐Term  Assets   Working  Capital   Debt   Treasury   Short-­‐Term   Inventory   Outside  Capital   Creditors   Short-­‐term  bank   VAT   11/3/11  
  15. 15. 1  M  Tshirt+    94  M  EUR   1st  liga   VS   Price  is  what  you  pay.  Value  is  what  you  get   Warren  Buffea   11/3/11  
  16. 16. FCF:  what  is  it?   l  CAPM:  r%  =  α  +  βp  =  Rf  +(β*MRP)   l  WACC=  Ke  *  (E  /  (D+E))  +  Kd  (D  /  (D+E))   l  FCF  =  Net  income  +  deprecia;on  –  changes  in  working  capital   –  Capital  expenditures      Earnings   Expenses   EBITDA   Amort.   EBIT   T  in  EBIT   Amort.   NOPLAT   Varia3on   CAPEX   FCF    WC   11/3/11   16  
  17. 17. WHO  IS  WHO   SICAVs   Family  offices   Insurance  &   Brokers   Pension   Funds   ¿?   Endowments   Private   Banking   Hedge  Funds   Grants  and   Subsidies   Angel  Funds   CVC   Funds  of   Comercial   Funds   Banks   Investment   Banking   Sovereign   Funds  11/3/11  
  18. 18. HOW  PLAYERS  INVEST   Friends   and   Venture     Funds  Origin   family   3   1   Family  Office   Capital  Involvement   Own  Money   Others  Money   Business  Angels   Industrialists   2   Financial  Purity   Source:  Perennius  
  19. 19. INVESTMENT  STAGES  11/3/11  
  20. 20. THE  CHASM  
  21. 21. INVESTMENT  CRITERIA   Why  they  Invest   What  they  Measure   Decision  Time  Family,  Friends  and   Personal   Confidence   Fast   Fools   Commitment   Subsidies  and   Policy   Compliance   Slow   Public  Assistence   alignments   merits   Business  Angels   Personal  affinity   Profitability   Fast   Investment  Venture  Capitalists   Profitability   Slow   criteria   Contribu;on  to  Industrial  Partners   Strategic  criteria   Slow   business   Source:  HighGrowth;  Elaboración  Okuri  Ventures  
  22. 22. DESIRED  RETURN   Target  yearly   Holding  period   Investment   Entry/exit   return   (years)   death  rate   mul3plier   PE   25%+   3-­‐5   <20%   x3,5   VC   25%+   3-­‐5   >60%   x10+   BA   15%+   4-­‐7   >80%   x20+  11/3/11  
  23. 23. ORIGIN  OF  MULTIPLIERS-­‐LEVERS   Shareholder  Return   PE   25 Investment   Mul3plier   20 15 VC   10 5 0 Source:  Cifras  orientaGvas   Sales Margin Debt Arbitration Total11/3/11  
  24. 24. CONCLUSION   1  /  (1-­‐n)  Source: http://www.paulgraham.com/equity.html 11/3/11  

×