The Fairshare Model is a performance-based capital structure for companies that seek to raise venture capital via a public offering. It balances and aligns the interests of investors and employees.
Presentation on Fairshare Model made by Karl Sjogren on Oct. 14, 2014 to Silicon Valley chapter of Nat'l. Asso. for Business Economics.
The Fairshare Model is a performance-based capital structure for companies that raise venture-capital via a crowdfunded IPO
Fairshare Model presentation to Mayer Brown law firm 9.10.20Karl Sjogren
Presentation on Fairshare Model to the Capital Markets group of Mayer Brown. Mayer Brown has more than 1,500 lawyers and by revenue is the 19th largest law firm in the world. Slides added to list opportunities for clients to use Fairshare Model and major legal issues to explore.
Fairshare model cannabis presentation 11.19.15Karl Sjogren
Cannabis investor webcast presentation on The Fairshare Model: a performance-based capital structure for companies that raise venture capital via a public offering
Fairshare Model presentation for F50's SVE Demo Night @ Google Karl Sjogren
July 30, 2019 presentation by Karl Sjogren, author of the book "The Fairshare Model: A Performance-Based Capital Structure for Venture-Stage Initial Public Offerings."
Material used in the Entrepreneurship course (Bachelor in Management) at the Toulouse Business School (Barcelona Campus)
November 2017
Brief review of the different stages in the life of a Start Up company, type of investors, valuation methods, the importance of growth management
Presentation on Fairshare Model made by Karl Sjogren on Oct. 14, 2014 to Silicon Valley chapter of Nat'l. Asso. for Business Economics.
The Fairshare Model is a performance-based capital structure for companies that raise venture-capital via a crowdfunded IPO
Fairshare Model presentation to Mayer Brown law firm 9.10.20Karl Sjogren
Presentation on Fairshare Model to the Capital Markets group of Mayer Brown. Mayer Brown has more than 1,500 lawyers and by revenue is the 19th largest law firm in the world. Slides added to list opportunities for clients to use Fairshare Model and major legal issues to explore.
Fairshare model cannabis presentation 11.19.15Karl Sjogren
Cannabis investor webcast presentation on The Fairshare Model: a performance-based capital structure for companies that raise venture capital via a public offering
Fairshare Model presentation for F50's SVE Demo Night @ Google Karl Sjogren
July 30, 2019 presentation by Karl Sjogren, author of the book "The Fairshare Model: A Performance-Based Capital Structure for Venture-Stage Initial Public Offerings."
Material used in the Entrepreneurship course (Bachelor in Management) at the Toulouse Business School (Barcelona Campus)
November 2017
Brief review of the different stages in the life of a Start Up company, type of investors, valuation methods, the importance of growth management
Entrepreneurship and Financing Options for InnovationSerdar Torun
The presentation outline is:
- Entrepreneur and Entrepreneurship in Turkey
- Financing Stages
- Financing Options (4Fs, Micro-credits, Business Angels, Corporate Venture Capital, Venture Capital, Public Capital Markets)
- Joint R&D
- Spin-Offs
Kleos Africa Webinar - Securing Equity FinancingGlory Enyinnaya
Capital is to a business as blood is to a human being. It’s not the fundamental reason for its existence but it’s essential for survival.
To grow in 2020, you need to chart a roadmap for growth and, more often than not, investors will help you get to the next level.
However, statistics show that only 1 in 1000 businesses succeeds in securing investment capital. If you’ve been struggling for capital, and don’t know where to start, this webinar is for you.
In this webinar, Kleos Africa’s Lead Consultant and Beta Gamma Sigma’s Board member, Glory Enyinnaya, will take you through the steps of raising capital from equity investors.
Glory brings to bear her considerable technical expertise as an Accenture-trained management consultant and First Class accountant. She will also draw upon her experience as a technology entrepreneur and the Regional representative of Faster Capital, a venture capital fund in the United Arab Emirates that invests in entrepreneurial projects around the world.
2020 has just begun – will it be the year your business gets funded?
Envisage. Stratigize. Execute: IDEA to BUSINESSAnjana Vivek
Coming up with a brilliant idea for your venture is just the beginning, taking it forward is where many people flounder. Session at Eximius, the Entrepreneur Summit at IIMB on how to go about implementing your idea.
Introduction to Venture Capital and Private Equityguest89b446
I was invited to speak at the HR College of Commerce in Mumbai today as part of their "Corporate Dialogue" lecture series. This deck introduces freshman and sophomore students in commerce, economics and finance to venture capital, private equity and entrepreneurship. It also presents a primer on career options in finance for college graduates in India.
VC, PE, Angel, HNI, Seed Investor, Incubator, Accelerator, Corporate Investor, Strategic Investors, 3 Fs .. how do you distinguish between them? What is the homework you need to do before you approach an investor? How will you stand out from the clutter and demonstrate you can create value? How will you crack the exam of getting investors into the company, assuming you have a great idea, product, service or solution?Should you think of Plan B? Should you revisit your Business Model?
Start ups challenges for funding optionsAnjana Vivek
How do you choose from this range of investors and more: HNIs, informal and formal Angel groups,Seed Funds,Venture Capital, Private Equity, Banks, Strategic Investors, Corporate Funds; (Family) Business Groups, Indian & Global, Government supported funds, Impact Investors, Incubators, Accelerators, Crowd funding, Online funding platforms
To be able to distinguish among the five forms of entrepreneurial capital
To consider how to attract financing from your family and how to bootstrap a business
To identify how informal investors differ from other parts of the funding community
To differentiate between debt and equity as methods of financing
To examine commercial loans, social lending and public stock offerings as sources of capital
To understand the stages of venture investing
To study the market for venture capital and to review venture capitalists’ evaluation criteria for new ventures
To discuss the importance of evaluating venture capitalists for a ‘best fit’ selection
To discuss private placements as an opportunity for equity capital
To examine the business angel market
To describe new forms of entrepreneurial capital beyond financial capital
To be familiar with Islamic finance and micro-credit
To understand the criteria used by impact investors
To appreciate the need for raising natural capital as part of an entrepreneurial venture.
Impress the Angels: How to Make It Into "Startup Heaven"Palo Alto Software
What is an angel investor? How do they invest? What's the difference between an angel investor and a venture capitalist?
This presentation answers all these questions, and also includes tips from actual angel investors on what you can do to impress an angel.
The Importance of Getting Financing or Funding, Sources of Personal Financing, Examples of Bootstrapping Methods, Alternatives for Raising Money for a New Venture, Preparing to Raise Debt or Equity Financing, Sources of Equity Funding
Entrepreneurship and Financing Options for InnovationSerdar Torun
The presentation outline is:
- Entrepreneur and Entrepreneurship in Turkey
- Financing Stages
- Financing Options (4Fs, Micro-credits, Business Angels, Corporate Venture Capital, Venture Capital, Public Capital Markets)
- Joint R&D
- Spin-Offs
Kleos Africa Webinar - Securing Equity FinancingGlory Enyinnaya
Capital is to a business as blood is to a human being. It’s not the fundamental reason for its existence but it’s essential for survival.
To grow in 2020, you need to chart a roadmap for growth and, more often than not, investors will help you get to the next level.
However, statistics show that only 1 in 1000 businesses succeeds in securing investment capital. If you’ve been struggling for capital, and don’t know where to start, this webinar is for you.
In this webinar, Kleos Africa’s Lead Consultant and Beta Gamma Sigma’s Board member, Glory Enyinnaya, will take you through the steps of raising capital from equity investors.
Glory brings to bear her considerable technical expertise as an Accenture-trained management consultant and First Class accountant. She will also draw upon her experience as a technology entrepreneur and the Regional representative of Faster Capital, a venture capital fund in the United Arab Emirates that invests in entrepreneurial projects around the world.
2020 has just begun – will it be the year your business gets funded?
Envisage. Stratigize. Execute: IDEA to BUSINESSAnjana Vivek
Coming up with a brilliant idea for your venture is just the beginning, taking it forward is where many people flounder. Session at Eximius, the Entrepreneur Summit at IIMB on how to go about implementing your idea.
Introduction to Venture Capital and Private Equityguest89b446
I was invited to speak at the HR College of Commerce in Mumbai today as part of their "Corporate Dialogue" lecture series. This deck introduces freshman and sophomore students in commerce, economics and finance to venture capital, private equity and entrepreneurship. It also presents a primer on career options in finance for college graduates in India.
VC, PE, Angel, HNI, Seed Investor, Incubator, Accelerator, Corporate Investor, Strategic Investors, 3 Fs .. how do you distinguish between them? What is the homework you need to do before you approach an investor? How will you stand out from the clutter and demonstrate you can create value? How will you crack the exam of getting investors into the company, assuming you have a great idea, product, service or solution?Should you think of Plan B? Should you revisit your Business Model?
Start ups challenges for funding optionsAnjana Vivek
How do you choose from this range of investors and more: HNIs, informal and formal Angel groups,Seed Funds,Venture Capital, Private Equity, Banks, Strategic Investors, Corporate Funds; (Family) Business Groups, Indian & Global, Government supported funds, Impact Investors, Incubators, Accelerators, Crowd funding, Online funding platforms
To be able to distinguish among the five forms of entrepreneurial capital
To consider how to attract financing from your family and how to bootstrap a business
To identify how informal investors differ from other parts of the funding community
To differentiate between debt and equity as methods of financing
To examine commercial loans, social lending and public stock offerings as sources of capital
To understand the stages of venture investing
To study the market for venture capital and to review venture capitalists’ evaluation criteria for new ventures
To discuss the importance of evaluating venture capitalists for a ‘best fit’ selection
To discuss private placements as an opportunity for equity capital
To examine the business angel market
To describe new forms of entrepreneurial capital beyond financial capital
To be familiar with Islamic finance and micro-credit
To understand the criteria used by impact investors
To appreciate the need for raising natural capital as part of an entrepreneurial venture.
Impress the Angels: How to Make It Into "Startup Heaven"Palo Alto Software
What is an angel investor? How do they invest? What's the difference between an angel investor and a venture capitalist?
This presentation answers all these questions, and also includes tips from actual angel investors on what you can do to impress an angel.
The Importance of Getting Financing or Funding, Sources of Personal Financing, Examples of Bootstrapping Methods, Alternatives for Raising Money for a New Venture, Preparing to Raise Debt or Equity Financing, Sources of Equity Funding
Innovación Digital, Fintech, Bitcoin y Blockchain Alan Colmenares
El 10 de junio tuve la oportunidad de hablarle a una audiencia de personas dentro y fuera del banco BBVA sobre la innovación digital, fintech, Bitcoin y Blockchain dentro del contexto de la transformación del sector de banca y finanzas. Esta son las diapositivas de dicha presentación.
List of Software Development Model and MethodsRiant Soft
RiantSoft a Software Development Company derived the most useful and different types of Software Development Model for the users who want to know the development process. RiantSoft is specialized in custom software development with latest cutting edge technologies.
Fairshare Model HWZ Swiss presentation 6.19.19Karl Sjogren
Presentation on The Fairshare Model made on June 19, 2019 in San Francisco by Karl Sjogren to a cohort of visitors from HWZ Zurich University of Applied Sciences in Business Administration.
Most of the time VCs have one or more discrete reasons for saying “no.” Although it would be ideal if they relayed them to founders clearly and openly, they sometimes feel pressure to take the less confrontational path and say vague things “this is too early for us” when the truth is more difficult to hear. VCs have a code around rejection language that often leaves founders scratching their heads to interpret, but candor is usually better for both parties long-term. Truthfully, the reason for the “no” often has little to do with the founder or the details of the business, but lots to do with that VC’s personal interests, portfolio, or history.
What is venture capital, and how does it work?MyCareCrew1
Discover how venture capital works, its risks & rewards, and its role in fueling startup growth. Learn how venture capital firms work & their impact on startups.
Critical Analysis of Reasons of IPO failurenitingoswami
Final year project for PGDBM from MS ramaiah Institute Of Management.
It discuss various reasons why IPO fails in Market and various takes of Investors and Rural India on IPO.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.
Fairshare model fintech presentation 05.28.15
1. Fairshare Model: A performance-
based capital structure for companies that
raise venture capital via a public offering
Karl M Sjogren (book expected in Q4 2015 Q1 2016)
OPEN MIC NIGHT --- MAY 28, 2015
THE VAULT, SAN FRANCISCO
Hofstadter's Law: It always takes longer than you expect, even when you take into account Hofstadter's Law.
2. September 24, 2015 Update
Since I gave this presentation:
Three chapters (section IV) have been added to the draft I am “crowd vetting” at
www.fairsharemodel.com They address the concerns that some have about making it
easier for small venture-stage companies to sell their stock to public investors. I discuss
fraud, overpayment, failure, unethical sales practices as well as other objections to equity
crowdfunding.
I am a slower writer than I hoped I would be in May 2015; I pushed expected publication
to Q1 2016.
My draft material needs editing as well and other work before it is ready to be published
in print and e-book formats. I am exploring options to crowdfund the cost of that work.
The balance of this slide deck is unchanged.
3. Fairshare Model: a crowd-vetted book
Section I – Overview
Chap. 1 – Set-up
Chap. 2 – The Fairshare Model
Chap. 3 – The Problem With a
Conventional Capital Structure
Chap. 4 – Crowdfunding
Chap. 5 – Target Companies
Chap. 6 – Fairshare Model
History & Projection
Section II – Context
Chap. 7 – Economic Growth
Chap. 8 – Income Inequality
Chap. 9 – Cooperation as a Tool
for Competition
Chap. 10 – Tao of the Fairshare
Model
Section III – Valuation
Chap. 11 – Concepts
Chap. 12 – Calculation
Chap. 13 – Evaluation
Chap. 14 – Disclosure
Topics for Section IV (not written yet) –
Fraud, Failure and some wrap-up topics
There are 14 draft chapters at www.fairsharemodel.com
4. The Fairshare Model Begins Here
ENTREPRENEUR:
I have an idea but need money
INVESTOR:
How much of your company do I
get if I give you the money?
5. Vision, Goals and Perspective
Vision
Middle Class investors can invest in the IPOs of venture-stage companies…
on terms comparable to those that venture capitalists get in a private offering.
Goals
1. Alternative to a VC round (for companies).
2. Liquidity for pre-IPO investors (limited if offering is small).
3. Attractive option for public investors to be “mini-angels.”
Perspective is that of average investors. Ranking of interests:
1st Place --- Average IPO investors (i.e. what is best for them?)
2nd Place --- [Tie] Entrepreneurs and pre-IPO investors
3rd Place --- Secondary market investors
Fairshare Model
is an idea.
It has not been
used before.
Look at IPOs from this angle and
you’ll have an intuitive sense for
the Fairshare Model.
6. What is a “Venture-Stage” Company?
A company with these risk factors: • Market for its products/services is uncertain
• Unproven business model
• Uncertain timeline to profitable operations
• Negative cash flow from operations
• Meaning, it requires investor cash to operate
• Little or no sustainable competitive advantage
• Execution risk; team may not build value for investors
Many public companies list such risk factors in their disclosure documents. Crowdfunding will
increase the number of public venture-stage public companies…but they are not new.
7. Fairshare Model (for a public offering)
• Two classes of stock, Investor Stock and Performance Stock.
• Both vote, only Investor Stock can trade.
• Performance Stock can never trade.
• Based on quarterly measures of performance, Performance
Stock converts into Investor Stock.
Approval from each class required for:
• Board member election
• Change to conversion criteria.
• Compensation plans involving Investor Stock.
• Changes to capital structure.
• Acquisition matters.
8. Fairshare Model premise:
IDEAS ARE JUST A MULTIPLIER OF EXECUTION
Value of an Idea Value of Execution
Awful Idea = -1 No Execution = $1
Weak Idea = 1 Weak Execution = $1,000
So-So Idea = 5 So-So Execution = $10,000
Good Idea = 10 Good Execution = $100,000
Great Idea = 15 Great Execution = $1,000,000
Brilliant Idea = 20 Brilliant Execution = $10,000,000
To make a business, you need to multiply the two.
The most brilliant idea, with no execution, is worth $20.
The most brilliant idea takes great execution to be worth $20,000,000.
Tip of the hat to:
Derek Sivers www.sivers.org
9. That Premise Doesn’t Explain the
Valuation of Venture-stage Companies
What drives the increase in valuation that often
occurs as a company approaches its IPO?
Is it performance…
…. or is it something else?
10. Two Explanations
1. The Next Guy Theory of Valuation
2. Market Forces
Discussed in chapter 3--The Problem With a
Conventional Capital Structure
11. Next Guy Theory of Pricing
For an investment, the price is no more than what the buyer believes the
Next Guy will pay, less a discount.
13. Market Forces
Next Guy Theory applies to items without utility…like investments.
Retail
Wholesale
For items with utility (food, clothing, etc.), a wholesale/retail
price discrepancy is common.
Apply this concept to the IPO market:
•“Product” = equity in a venture-stage company
•“Manufacturer” = issuer
•“Wholesale customers” = pre-IPO investors
•“Retail customers” = public investors
14. Comparable Product with a Retail Markup?
No! The product is not comparable, there are important differences.
The product sold at wholesale to pre-IPO investors is better than the retail version.
• The stock that VCs get have price protection and other features (i.e. liquidation preferences, anti-
dilution provisions, etc.)
The product sold to public investors lacks such features.
So, the retail buyer gets an inferior product and pays more for it!
I can’t think of another market—a competitive market—where that happens. Can you?
15. What Explains the Price Increase in “The
Product” as it Approaches an IPO?
Four hypothetical drivers
1. It is considered “normal”
- But, many things once considered normal are no longer
The Next Guy Theory provides insight into the dynamics, but what are the drivers?
2. A bigger neighborhood
- More Potential Buyers = Higher Potential Demand = Higher Potential Price
3. Competitive market forces are weak
- If strong, issuers would compete for investors by offering lower valuations
4. VC value-add (knowledge, connections, ability to write a big check quickly)
- Challenge for companies that crowdfund – “How to replicate VC value-add?”
- How much is the VC value-add worth to public investors?
16. Whatever the explanation, what risk does the
IPO valuation present for public investors?
Why so
much
downside
exposure?
17. Because of a Conventional Capital Structure
John Kenneth Galbraith coined the term “conventional wisdom.”
There is conventional wisdom about how to organize (and value) the ownership interests in a
corporation. It is reflected in a “conventional capital structure.”
Defining characteristic of a conventional capital structure:
A value for future performance must be set when a company raises equity capital
He uses it to describe a convenient and comfortable point of view that is often false.
Hard to do in a reliable manner!
Nonetheless, a conventional capital structure requires…indeed, it demands a value for future
performance at the time of an equity raise.
18. The Little Shop of Horrors that is a
Conventional Capital Structure FEED ME A
VALUATION
SEYMOUR!
19. A Conventional Capital Structure Poses
Problems for Public Investors too
1. The basis for a valuation is shaky.
2. They assume most of the risk that it is too high.
Interlaced foundations of the problem
Public investors…
• Pay “retail” but don’t know it.
• Don’t get a better deal because issuers see little
advantage in offering one. Investors may respond
with “what’s valuation? Is it worth?”
• Don’t demand a better deal because they are not
valuation savvy; terms were not an issue in the
Occupy Wall Street protests.
• Are not valuation savvy, in large part, because
the SEC doesn’t require valuation disclosure.
20. The Fairshare Model is Unconventional
It’s complexity is designed to favor average investors—as well as well-performing teams.
Remarkably, it provides incentive to offer IPO investors a low valuation. Entrepreneurs do not
care what the valuation is; it doesn’t affect their financial position or voting power.
What matters is “what does it take for Performance Stock to convert into Investor Stock?”
It is unconventional because there is no need to place a value on future performance!
BTW, that’s another difference—where there is complexity in a conventional
capital structure, it is frequently to advantage insiders over average investors.
The incentive? A rise in the market cap can be defined as performance, triggering conversions.
22. Tao of the Fairshare Model
When should the ownership interests of insiders be defined,
before or after performance is delivered?
Put another way…Who should bear the risk of uncertainty,
should it be insiders (employees and existing investors)…
or should it be new investors?
Taoism is a Chinese philosophy about truths. Finding one’s tao requires meditative and moral exploration.
Fairshare Model’s tao: harmony within the uncertainty inherent in a venture stage investment.
Contemplate this question:
Those who believe the risk of future
performance should be borne by new investors
will favor a conventional capital structure.
Those who believe it should be borne by insiders
will favor the Fairshare Model.
23. Visualize the tao of the Fairshare Model
Imagine a long balloon. But instead of air, it is full of uncertainty.
Ownership side Performance side
And certainty is represented by a weight
One end represents ownership interests while the other represents future performance.
Principle
In a venture-stage company,
uncertainty can be moved
but not eliminated.
24. Where the Uncertainty Is
The bet is on valuation. The bet is on human behavior; will shareholders agree
on how to reward performance?
A different bet, not necessarily a better one!
25. How VCs Deal With Uncertainty
Takeaway
The Fairshare Model simulates a
VC deal structure in a public
offering!
Discussed in
chapter 10
26. Entrepreneurs: Pick Your Challenge!
“What is the value of my future
performance now?
“How do I define my deliverables?”
Meanwhile…
Conventional Capital Structure Fairshare Model
vs.
27. …VCs and Wall Street banks enjoy so much
success with venture-stage IPOs…. that, eventually, public investors
may say…
Diner scene from 1989 movie, When Harry Met Sally
(portrayed here by Sally, simulating an orgasm)
As this happens, interest in the Fairshare Model will grow!
28. Chapters 3, 11 and 13 discuss the dynamics that affect the valuation of venture-
stage companies.
The most controversial assertion is that valuations reflect weak market forces…an
inefficient market…driven by public investors (Next Guys) who are:
• unsure what valuation is,
• why it is important, and
• how to calculate it, let alone evaluate it.
Chapter 14 argues that regulators could strengthen market forces if they require
issuers to disclose their valuation. Please join me in calling for it!
Let’s look at how the Fairshare Model might play out in some scenarios.
Skeptical? Why don’t companies compete for
IPO investors by offering better deal terms ?
29. What Kind of Companies Might Adopt
the Fairshare Model?
Feeder Seeks capital to develop a product and be acquired.
Aspirant Aspires to build for the long-term.
Pop-up Fund a project, product, movie, game, invention, oil well, etc.
Spin-Out Tired backers; a VC’s “living dead” or to-be-spun-out division of a company.
Rejuvinator Established company in financial distress (i.e., GM in 2009?).
These categories can overlap. Plus, a company may be a shape-shifter.
• A Feeder may tell you it’s a Feeder….but it might may tell you that it’s really an Aspirant.
• A Pop-Up may think that it’s a Feeder or Aspirant.
• A Spin-Out can’t remain a Spin-Out—it must evolve into a Feeder or an Aspirant.
• An Aspirant may wind up being a Feeder after all.
Discussed in chapter 5
30. Category of
Company
Strategic
for
Fairshare
Model? Goal
Likely
Offering
Size
Likely to be
a SEC
Reporting
Company?
Expectation of
Performance
Stock
Conversion
Secondary
Trading Market
Feeder Yes
Launch
product—get
acquired.
$3M to
$7M
Maybe High
Pink Sheets; principal
investor exit via
acquisition
Aspirant Yes
Build a
company
that lasts
$5M to
$20M+
Yes High
Pink Sheets, a
regional exchange, or
NASDAQ Micro for
larger ones
Pop-Up No
Offer equity
in a project
Less than
$5M
Unlikely Low Same as Feeder
Spin-Out No
Alternative
for a new VC
round
$5M to
$20M+
Yes High Same as Aspirant
Rejuvenator No
Fund a
turnaround
$20M+ Yes High
NASDAQ Micro or
better
Target Companies for Fairshare Model
We will
look at
scenarios
for these
two
31. Prelude to Feeder & Aspirant Charts
Five charts follow that illustrate possible scenarios for Feeders & Aspirants.
They show how conversion of Performance Stock may dilute Investor Stock.
Feeder charts
1. Acquired 3 years after the IPO (with
presumed performance factor)
2. Acquired 1 year after the IPO (with
presumed performance factor)
Aspirant charts
3. No Performance at all
4. Presumed performance but no actual
performance
5. Presumed performance, then actual
performance
100% of Investor Stock = Investor Stock @ IPO + Performance Stock that converts
32. IPO + 1 yr + 2 yrs + 3 yrs
From Money 100% 92% 84% 50%
From Performance 8% 16% 50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
%ofInvestorStock
Time Since Fairshare Model Offering
Shareholders agree that
Performance Stock get 50%
of the acquisition proceeds
Feeder Acquired 3 Years After IPO
“Presumed performance” is a
employee goodwill incentive.
No need to define or measure
quarterly performance for a period
(e.g., development phase).
Presumed performance assumption:
• 8% year
• 20% maximum
Acquisition offer in year 3.
Investor and Performance
Stockholders agree to split the
price evenly. So, 50% of the
Investor Stock in year 3 is from
Performance Stock.
No agreement, no acquisition.
Note 3 year time scale
Investor Stock issued via
Performance Stock
conversion for “presumed
performance”
33. Feeder Acquired 1 Year After IPO
IPO + 1 Qtr + 2 Qtrs + 3 Qtrs + 4 Qtrs
From Money 100% 98% 96% 94% 40%
From Performance 2% 4% 6% 60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Time Since Fairshare Model Offering
Shareholders agree that Performance
Stock gets 60% of proceeds
%ofInvestorStock
Same presumed performance
assumption as before (8% year
or 2% per quarter).
Acquisition offer 1 year after IPO.
Shareholders agree that 60%
of the proceeds should go to
Performance Stockholders.
It is 10% higher…because
the offer came faster.
Note 1 year time scale
Performance Stock conversions
based on presumed performance
34. IPO + 1 Yr + 2 Yrs + 3 Yrs + 4 Yrs + 5 Yrs + 6 Yrs + 7 Yrs
From Money 100% 100% 100% 100% 100% 100% 100% 100%
From Performance 0% 0% 0% 0% 0% 0% 0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
%ofInvestorStock
Time Since Fairshare Model Offering
No Performance Stock conversion because there is
no presumed nor actual performance (i.e. a dud).
Aspirant: No Performance Conversion
With neither presumed or actual
performance, there are no
conversions. Therefore, only
Investor Stock issued for money
or pre-IPO performance is
tradable.
Company raises capital to build
product and launch business.
No presumed performance rule.
All Aspirant charts use 7 year time scale
Imagine it is…
• A biotech and it’s product
fails FDA testing;
• A game developer that
doesn’t release a product; or
• A software developer
whose product flops.
35. Aspirant: Only Presumed Performance
Same presumed performance
assumption as for Feeder:
• 8% year
• 20% maximum
• Yr 1 - 8% conversion
• Yr 2 – 8% conversion
• Yr 3 – 4% conversion
Company fails to meet
performance goals, so
conversions cap at 20%.
IPO + 1 Yr + 2 Yrs + 3 Yrs + 4 Yrs + 5 Yrs + 6 Yrs + 7 Yrs
From Money 100% 92% 84% 80% 80% 80% 80% 80%
From Performance 8% 16% 20% 20% 20% 20% 20%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
%ofInvestorStock
Time Since Fairshare Model Offering
Presumed performance conversion of 8% per
year--capped at 20%
No conversion for actual performance
36. IPO + 1 Yr + 2 Yrs + 3 Yrs + 4 Yrs + 5 Yrs + 6 Yrs + 7 Yrs
From Money 100% 92% 84% 68% 54% 42% 32% 24%
From Performance 8% 16% 32% 46% 58% 68% 76%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
%ofInvestorStock
Time Since Fairshare Model Offering
Presumed performance
conversion of 8% for
year 1 & 2
Conversions in years 3 – 7
reflect actual performance
Aspirant: Presumed & Actual Performance
Same presumed performance
assumption
• Year 1: 8% conversion
• Year 2: 8% conversion
• Year 3: 4% conversion
But performance is strong;
conversions exceed the
presumed performance.
Total = Presumed + Actual
Year 3: 16% = 4% + 12%
Year 4: 14% = n/a + 14%
Year 5: 12% = n/a + 12%
Year 6: 10% = n/a + 10%
Year 7: 8% = n/a + 8%
This team performs so well, it winds up with
76% of the Investor Stock after 7 years—far
more than would be possible with a VC.
Scratch pad to calculate annual conversions
32 - 16 = 16 58 - 46 = 12
46 - 32 = 1416 - 8 = 8
Cumu-
lative
8%
16%
Below
Cumu-
lative
32%
46%
58%
68%
76%
68 - 58 = 10
76 - 68 = 88 - 0 = 8
37. The Fairshare Model bargain for investors
If the company performs, investors will be diluted on a percentage basis—their slice of the
ownership pie will be reduced, possibly dramatically.
However, if the performance translates into a higher valuation, investors should not suffer
economic dilution—their stake should grow in value.
VCs like to say “I’d rather own a small slice of a big pie than a large slice of a small pie.”
Same principle.
38. The Fairshare Model bargain for employees
In addition to other compensation--salary, benefits, bonuses and stock options on its Investor
Stock-- employees have an interest in its Performance Stock pool.
• Performance Stock is like cheap founder’s stock; its only value is its ability to vote and its
potential to convert into Investor Stock.
As the team performs well enough to meet the conversion criteria, employees have another way to
earn stock that they can sell (or hold).
Huge Potential: A company that adopts the Fairshare Model could have a competitive advantage
with respect to attracting and managing human capital.
Wouldn’t you be pleased to
get an offer that includes
Performance Stock?
An employer’s “brand” reflects
how it implements it’s
philosophy about people.
39. Balance & Align Interests: Shared Values
Entrepreneurs have an incentive to offer public investors a low valuation.
Equity incentives are tethered to collective operational performance vs. valuation at individual option grant
date, which employees don’t control.
Investors have an interest in helping the company meet its goals
Bottom Line---The use of cooperation as a competitive tool
VS.
40. 1st Challenge for the Fairshare Model
Show that a lot of investors like it! They signal interest in companies that use it.
We Are Here!
We Are Here!!
We Are Here!
We Are Here!!!
BEFORE companies think about how to make the Fairshare Model work for them…
….a LOT of you need to make noise.
Each of your voices must generate buzz.
Sounds that leads others to take note and join in.
People who like the Fairshare Model must combine their small voices and shout….
..just like the tiny residents of Whoville.
41. 2nd Challenge for the Fairshare Model
Debug and tune it more tightly. This will be done with entrepreneurs, attorneys, accountants,
angel investors, experts in capital markets, etc.
A conventional cap structure has Ponderables too!
• Does it scale…downward? Its approach to
valuation works for established companies, but,
does it work well for public venture-stage
companies?
• Can the interests of investors and employees be
better aligned as the valuation climbs?
The “Ponderables”:
• How might performance be defined?
• Who should define performance?
• How might it be measured?
• Who should measure it?
• How should rewards of performance be allocated?
• Who should administer the rewards of performance?
• What are the tax and accounting implications of the Fairshare Model?
Variations based on industry, stage of development,
geography, personality…
42. 3rd challenge for the Fairshare Model
Time and experience. Sustaining goodwill between the providers of capital and labor is the
central challenge.
Now
44. The new frontier…
Better Capitalism
This is the construction of the Fairshare Model.
It’s mission: to explore new relationships
between investors and employees,
to help entrepreneurs raise venture capital,
to boldly go where no capital structure has gone
before!
45. Help Build the Fairshare Model!
1) The Fairshare Model is in competition for inclusion in the world’s first crowdsourced
FINTECH book. *Recommend* the abstract…tomorrow or Saturday (before June)!
◦ Google “The FINTECH book" to learn more about the project
◦ Google “The FINTECH book" + “Fairshare Model” to see the short abstract
2) Read the draft chapters at www.fairsharemodel.com
3) Help make it better. Send comments, challenges (love them!) and suggestions to me
at Karl@FairshareModel.com
4) Create buzz about the model!