Most business appraisal assignments are for small private companies with revenue less than $10 million, yet current cost of capital estimation methods rely almost entirely on large public company security returns. But these small private companies differ from large public companies in so many fundamental ways, and consequently, there are issues that make current methods for developing discount rates unreliable when they are applied to small enterprises.
IPCPL is steeped in market transactions of small private businesses … think of IPCPL as the security market line of private company transaction data. It was developed to eliminate the problematic issues we face (e.g., company specific risk premium, tax rates for pass-through entities, leverage, liquidity discount) and to create a more defensible starting point for deriving the cost of capital of any private company with revenue less than $150 million.
Independent Contractor Compliance: What You Need To KnowMBO Partners
Join leading employment attorney Eric Rumbaugh from the law firm Michael Best & Friedrich for this seminar covering the risks and requirements for using independent contractors in your organization. Contingent workforce, 1099 risk, reclassification, coemployment, and more.
Find more resources for independent professionals at www2.mbopartners.com/ic-resources
The document discusses intellectual property (IP) audits for the music industry. It defines an IP audit as a methodical assessment of a business's IP assets, agreements, policies, and procedures. There are three types of IP audits: general purpose, event-driven, and limited purpose focused. An IP audit team should include expertise in IP and relevant technical areas. Conducting an audit involves planning, research, and using the findings to build value. The presentation provides an example and discusses completing an audit and using the results.
The document discusses integrity and ethics in entrepreneurship. It defines integrity and explains its importance for small businesses. It also discusses how integrity applies to stakeholders like owners, customers, and employees. Additionally, the document outlines challenges to integrity for small businesses and the benefits of acting with integrity. It explores topics like internet ethics, globalization, and building a business culture of integrity. Finally, the document touches on social entrepreneurship and considering both costs and opportunities of environmentalism.
This document discusses risk management for small businesses. It defines risk and different types of business risks including property risks, liability risks, and personnel risks. It then covers the risk management process, risk control methods, and evaluating insurance programs. Common types of business insurance are also summarized such as business owner's policies, commercial general liability, and life/disability policies.
Legal Management Process: A paradignm shift as a business enablerambergupt78
This document discusses the need for an integrated legal compliance framework for large conglomerates operating across multiple jurisdictions and business units. It proposes centralizing legal functions under a Chief Legal and Compliance Officer to standardize processes, policies, and represent the organization to regulators. This integrated approach can help identify and manage legal risks, train staff, and implement controls company-wide instead of managing compliance individually within each business unit. The document provides a case study and proposes a governance structure and processes for implementing such an integrated legal compliance system.
A Road Map to Major Changes Coming to Multi-Employer Pension Plans: What Part...Polsinelli PC
To address the severe underfunding of multi-employer pension plans and the teetering finances of the Pension Benefit Guaranty Corporation ("PBGC"), the Multi-Employer Pension Reform Act of 2014 ("MPRA") was enacted last December in the most significant legislation affecting these plans since 1980. Among other changes, the MPRA gives troubled funds the ability to reduce the pension benefits of participants, including benefits for some retirees already in pay-status. It also gives additional flexibility to the PBGC to help underfunded plans by providing its financial assistance and facilitating fund mergers and partitions. There are also special rules under MPRA that may impact an employer's withdrawal liability.
This webinar, presented by Employee Benefits and Executive Compensation chair Andrew Douglass and Labor and Employment vice-chair Brad Kafka, discussed how the MPRA changes affect multi-employer pension plans, and specific actions that employers should consider in light of MPRA changes taking effect this year.
This is a presentation about IEG's evaluation of the Doing Business Indicators. The Doing Business Indicators are the Bank Group's well-known tool for comparing the business regulatory environments of 178 countries.
How to Form and Operate a Network of Competing ProvidersPolsinelli PC
The Health Law Section of the Colorado Bar Association, together with the American Health Lawyers Association, hosted the 2nd Annual Colorado Health Law Symposium, a regional event co-sponsored by the nation's largest educational organization devoted to legal issues in the health industry. Mitchell Raup, Polsinelli Antitrust Shareholder presented How to Form and Operate a Network of Competing Providers at the symposium.
Independent Contractor Compliance: What You Need To KnowMBO Partners
Join leading employment attorney Eric Rumbaugh from the law firm Michael Best & Friedrich for this seminar covering the risks and requirements for using independent contractors in your organization. Contingent workforce, 1099 risk, reclassification, coemployment, and more.
Find more resources for independent professionals at www2.mbopartners.com/ic-resources
The document discusses intellectual property (IP) audits for the music industry. It defines an IP audit as a methodical assessment of a business's IP assets, agreements, policies, and procedures. There are three types of IP audits: general purpose, event-driven, and limited purpose focused. An IP audit team should include expertise in IP and relevant technical areas. Conducting an audit involves planning, research, and using the findings to build value. The presentation provides an example and discusses completing an audit and using the results.
The document discusses integrity and ethics in entrepreneurship. It defines integrity and explains its importance for small businesses. It also discusses how integrity applies to stakeholders like owners, customers, and employees. Additionally, the document outlines challenges to integrity for small businesses and the benefits of acting with integrity. It explores topics like internet ethics, globalization, and building a business culture of integrity. Finally, the document touches on social entrepreneurship and considering both costs and opportunities of environmentalism.
This document discusses risk management for small businesses. It defines risk and different types of business risks including property risks, liability risks, and personnel risks. It then covers the risk management process, risk control methods, and evaluating insurance programs. Common types of business insurance are also summarized such as business owner's policies, commercial general liability, and life/disability policies.
Legal Management Process: A paradignm shift as a business enablerambergupt78
This document discusses the need for an integrated legal compliance framework for large conglomerates operating across multiple jurisdictions and business units. It proposes centralizing legal functions under a Chief Legal and Compliance Officer to standardize processes, policies, and represent the organization to regulators. This integrated approach can help identify and manage legal risks, train staff, and implement controls company-wide instead of managing compliance individually within each business unit. The document provides a case study and proposes a governance structure and processes for implementing such an integrated legal compliance system.
A Road Map to Major Changes Coming to Multi-Employer Pension Plans: What Part...Polsinelli PC
To address the severe underfunding of multi-employer pension plans and the teetering finances of the Pension Benefit Guaranty Corporation ("PBGC"), the Multi-Employer Pension Reform Act of 2014 ("MPRA") was enacted last December in the most significant legislation affecting these plans since 1980. Among other changes, the MPRA gives troubled funds the ability to reduce the pension benefits of participants, including benefits for some retirees already in pay-status. It also gives additional flexibility to the PBGC to help underfunded plans by providing its financial assistance and facilitating fund mergers and partitions. There are also special rules under MPRA that may impact an employer's withdrawal liability.
This webinar, presented by Employee Benefits and Executive Compensation chair Andrew Douglass and Labor and Employment vice-chair Brad Kafka, discussed how the MPRA changes affect multi-employer pension plans, and specific actions that employers should consider in light of MPRA changes taking effect this year.
This is a presentation about IEG's evaluation of the Doing Business Indicators. The Doing Business Indicators are the Bank Group's well-known tool for comparing the business regulatory environments of 178 countries.
How to Form and Operate a Network of Competing ProvidersPolsinelli PC
The Health Law Section of the Colorado Bar Association, together with the American Health Lawyers Association, hosted the 2nd Annual Colorado Health Law Symposium, a regional event co-sponsored by the nation's largest educational organization devoted to legal issues in the health industry. Mitchell Raup, Polsinelli Antitrust Shareholder presented How to Form and Operate a Network of Competing Providers at the symposium.
What Drives Venture Capital A Perspective From Both S.docxberthacarradice
What Drives Venture Capital?
A Perspective From Both Sides of the Table
Paul Vroomen
*
*
Agenda
Introduction
How Venture Capital WorksThe Impact of Internal Rate of Return Expectations
Case Study: Sandbridge Technologies, Inc.A $15M Powerpoint Presentation
The Future of Venture CapitalBig Changes Coming….
*
Thought Experiment
You are an entrepreneur….You have worked for 10 to 12 hours per day, often 7 days a week for the past 3 years, You have risked your entire personal savings,You have endangered your marriage,You see your kids mostly just before they fall asleep,You have questioned your own sanity,
But, you finally have a working prototype….
*
The Entrepreneur’s View
What??
They want 10X return on their money?They want 65% ownership of my company?They want a controlling vote on the Board of Directors?They want to be paid their money first before anyone else gets anything, even me, the founder, if we sell the company?
Vulture Capitalists!!
*
*
The Venture Capitalists View
This guy has a good idea , BUT:
He has no CEO track record and has never run a company beforeHis executive team has significant holes (especially in marketing)The company’s business plan is way too optimistic, especially given that it has missed critical milestones, twiceThey have one significant customer, but that customer is known for collaborating with innovative start-ups and then doing their own thing
I will ensure that our term sheet enables me to protect my capital and is structured so that I can direct the CEO to correct the issues with the company or replace him with someone that can if he does not!
*
*
The Primary Reason
The Entrepreneur, by definition, is an optimist
The Venture Capitalist, by experience, is a pessimist
The partnership of the two can work, sometimes spectacularly,
if each understands what is driving the other.
*
*
How Venture Capital Firms Work
Venture
Capital
Firm
Managed by
General Partners
Limited Partners
All Accredited
Investors
Investor 1
Investor 2
Investor n
$xM
$yM
$zM
Company 1
Company 2
Company k
Venture Fund
Committed Capital
$(x+y+…+z)
Private Equity
Portfolio
$aM
$bM
$uM
Base+(1-c).Surplus
c.Surplus
Liquidity Event
C = “Carry” = 20% - 35%
Mgt. Fee ~2%p.a.
*
*
EBO and VC Historical Performance
*
Source: US Venture Capital Index and Selected Benchmark Statistics, June 2014, Cambridge Associates, LLC
IRR: Net cash on cash returns to Limited Partners (after deduction of management fees and carry percentages)
AVERAGE IRR (1999-2009)
Electronics: -0.54%
Financial Services: 14.42%
BioTech:16.04%
AVERAGE IRR (1999 -2009)
Information Technology: 24.23%
- Internet-Business:23.2%
- Internet-Commerce:37.8%
Implications of IRR Expectations
Required capital growth to achieve IRR:
To achieve 33% IRR, a $1 investment needs to grow to $7.40 in 7 years.
*Time from investment:5 Years7 Years10 YearsIRR: 25%3.0X4.8X9.3XIRR: 33%4.2X7.4X17.3XIRR: 50%7.6X17.1X57.7X
*
Typical VC Fund Performance ...
This document contains a disclaimer for information presented about valuing lost profits for a start-up company. It notes that the information is intended for general purposes only and should not be considered legal, accounting, or professional advice. It also states that the authors disclaim any liability for loss or risk resulting from the use of the information provided. The material may not be applicable to all circumstances and readers should consult qualified professionals for their specific needs.
Pricing Intellectual Proper Litigation Risk In IP Transactionsbrucelb
This document discusses pricing intellectual property (IP) litigation risk in transactions. It proposes a quantitative, business-focused approach using decision analysis and risk valuation. As an example, it examines how much a contract electronics manufacturer should charge customers to account for IP litigation risk when taking on more design responsibilities. Key factors in evaluating IP litigation risk from different potential plaintiffs are identified and base case estimates are provided for a specific product area. Developing sensitivity analyses on input variables can show their relative impact on expected risk values.
WG Consulting & ZE PowerGroup Lunch and Learn: Presenting a Dodd-Frank Softwa...WG Consulting
During a Lunch and Learn held with one of our esteemed Partners, ZE PowerGroup, our panel of experts discussed the challenges corporations find with Dodd-Frank and presented the software that WG Consulting and ZE PowerGroup built as an answer to those challenges.
This powerpoint represents a semester long consulting project carried out by myself and 4 other students for a local construction management firm named PJ Dick. Our project and presentation involved analyzing PJ Dick\’s proposed new business venture and recommending proper course of action through strategic analysis. This was then presented to the company\’s executive board.
Wipro conducted a strategic management assignment analyzing its business strategy. It included an introduction to Wipro's mission, vision and goals. It then analyzed various demographic, social, PESTEL and SWOT factors. Wipro's business strategy focuses on differentiation through industry depth, portfolio of services and global workforce. It operates in three business segments: global IT services and products, India and Asia Pacific IT services and products, and consumer care and lighting.
This document summarizes a report by CDP (Carbon Disclosure Project) on climate change in 2015. Some key points:
- CDP collected disclosure data on climate change from over 5,500 companies on behalf of 822 institutional investors representing $95 trillion in assets.
- The report analyzes corporate climate actions and emissions data across regions. It identifies companies demonstrating leadership on climate through measures like carbon pricing and low-carbon investment.
- CDP's executive chairman notes that decarbonizing the global economy is an ambitious long-term challenge, but companies are already taking meaningful action and investors are increasingly considering climate risks and opportunities in their portfolios.
This white paper discusses Integrated Project Delivery (IPD), a new project delivery approach that aims to integrate people, systems, structures, and practices into a collaborative process. IPD seeks to bring together owners, architects, engineers, contractors, and other experts very early in design to improve coordination and reduce waste. The paper distinguishes between "IPDish" approaches that use some IPD tools within traditional contracts, and "Pure IPD" which binds the project team contractually with shared risks and rewards. Key aspects of IPD discussed include early involvement of all expertise, team collaboration using tools like BIM from project start, and multi-party agreements that legally connect team members. The paper examines drivers for IPD adoption from
This document provides an overview of the SBIR/STTR programs, which provide $4 billion annually in funding for small businesses to conduct research and development with commercial potential. It summarizes the key aspects of the programs, including the three phases of funding, eligibility requirements for applicants and projects, the differences between SBIR and STTR, and tips for successful applications. BBCetc is an organization that assists companies in winning SBIR/STTR funding and using it to advance their technology development.
This document provides an overview of Chapter 14 on the cost of capital from a finance textbook. It discusses determining a firm's cost of equity, cost of debt, weighted average cost of capital, and how to use these calculations to value a company. The chapter outline lists sections on the cost of equity, debt, preferred stock, weighted average cost of capital, divisional costs of capital, and how WACC is used for company valuation. Key concepts covered include the dividend growth model and SML approach for calculating cost of equity, yield-to-maturity for cost of debt, and the weighted average calculation.
Creating alcohol-free environments to increase productivity and save lives. That is the mission of Boulder, CO-based SOBRSafe, Inc. The company is integrating a preventative detection technology platform through partnership, licensing and acquisitions, and is in protype phase with its launch product: the patented, proprietary SOBRSafe® device - a non-invasive, touch-based identity verification and alcohol detection solution.
It’s no secret that the major reporting regimes – MiFID II, EMIR, MiFIR, REMIT, CSDR, SFTR, FinfraG – have drastically impacted the European financial industry.
The level and volume of new regulations that businesses, firms, providers, and organisations are still adjusting to is only the beginning. Transaction reporting will continue to have a large impact on the infrastructure, resources, and budgets of organisations, providers, firms, and subsidiaries well into the future.
2020 Software Company Benchmark Report - 132 CompaniesKelly Thomas
This is the 2020-1 version. This will be updated regularly throughout the year based on new financials and market cap information.
Benchmark analysis of 132 publicly-traded software companies. Includes growth rates, gross margin, market capitalization, EBITDA, sales and marketing investment, R&D investment, G&A, stock compensation, operating income, revenue per employee, historical analysis, IPO analysis, free cash flow, and cash position, along with market cap correlation analysis and many others.
Lecture 4Evaluation and Mitigation of RisksCrucial considera.docxwashingtonrosy
Lecture 4
Evaluation and Mitigation of Risks
Crucial considerations for your new business venture
Business Planning
1
You & your business idea
Market segments & value proposition
Marketing Strategy
Operations plan
Risk &
strategic options
Financial plan
Resources available
Resources needed
New Venture Creation
Framework
(Burns, 2014)
Last weeks lecture and the first seminar – market segments, value proposition and marketing strategy
This week: operations plan and strategy
2
Lecture Outline
Identifying, Estimating & Mitigating Risk
Legal foundations, Regulatory, and Professional Considerations
People
Definition of Risk
“The possibility that an event will occur and adversely affect the achievement of objectives.”
External (e.g. economic trends, regulations, competition)
Internal (e.g. people, process, infrastructure).
“Identifying, managing, and exploiting risk across an organization has become increasingly important to the success and longevity of any business.”
(PWC, 2008:5)
What if…?
What if?
Micro / macro
5
Identifying, Estimating & Mitigating Risk
The biggest risk…
Successful entrepreneurs are calculated risk takers, not gamblers!!!
SWOT should help...
Strengths, Weaknesses, Opportunities, Threats
But SWOT is not so much a tool for analysis as a set of headings for organising the information garnered from your analysis.
SWOT gets over-used as a substitute for real strategic analysis. Don’t over-rely on it.
Entrepreneurs need to do more strategic analysis than a simple SWOT.
Macro-Environment Analysis - Assessing the Business environment with PESTEL
10
Political -Government stability -Tax policy -Foreign trade regulations- Social welfare policies – EU expansion
Economic - Business cycles - GNP trends - Interest rates - Money supply – Inflation – Unemployment - Disposable income
Sociocultural - Population demographics - Income distribution - Social mobility - Lifestyle changes - Attitudes to work and leisure – Consumerism - Levels of education - Fashion
Technological - Government spending on research - Government and industry focus on technological effort - New discoveries /developments - Speed of technology transfer - Rates of obsolescence
Environmental
Environmental protection laws - Waste disposal - Energy consumption – food miles/campaigns
Legal - Competition law - Employment law - Health and safety - Product safety
NB PRIORITISE
See VLE for local government example
Industry/Sector Analysis
Michael Porter gives us a useful tool to analyse the relationship between competitors, suppliers and the market…
Use Porter’s Five Forces to assess where risks may arise in the sector.
Porter’s (1980) Five Forces
Which risks matter?
Legal obligations
Ethical responsibilities
Threats that undermine your values
Threats to viability, reputation or commercial success
Threats to long-term sustainability
Different types of risk
Strategic risk (e.g.
Lecture 4Evaluation and Mitigation of RisksCrucial considera.docxmanningchassidy
Lecture 4
Evaluation and Mitigation of Risks
Crucial considerations for your new business venture
Business Planning
1
You & your business idea
Market segments & value proposition
Marketing Strategy
Operations plan
Risk &
strategic options
Financial plan
Resources available
Resources needed
New Venture Creation
Framework
(Burns, 2014)
Last weeks lecture and the first seminar – market segments, value proposition and marketing strategy
This week: operations plan and strategy
2
Lecture Outline
Identifying, Estimating & Mitigating Risk
Legal foundations, Regulatory, and Professional Considerations
People
Definition of Risk
“The possibility that an event will occur and adversely affect the achievement of objectives.”
External (e.g. economic trends, regulations, competition)
Internal (e.g. people, process, infrastructure).
“Identifying, managing, and exploiting risk across an organization has become increasingly important to the success and longevity of any business.”
(PWC, 2008:5)
What if…?
What if?
Micro / macro
5
Identifying, Estimating & Mitigating Risk
The biggest risk…
Successful entrepreneurs are calculated risk takers, not gamblers!!!
SWOT should help...
Strengths, Weaknesses, Opportunities, Threats
But SWOT is not so much a tool for analysis as a set of headings for organising the information garnered from your analysis.
SWOT gets over-used as a substitute for real strategic analysis. Don’t over-rely on it.
Entrepreneurs need to do more strategic analysis than a simple SWOT.
Macro-Environment Analysis - Assessing the Business environment with PESTEL
10
Political -Government stability -Tax policy -Foreign trade regulations- Social welfare policies – EU expansion
Economic - Business cycles - GNP trends - Interest rates - Money supply – Inflation – Unemployment - Disposable income
Sociocultural - Population demographics - Income distribution - Social mobility - Lifestyle changes - Attitudes to work and leisure – Consumerism - Levels of education - Fashion
Technological - Government spending on research - Government and industry focus on technological effort - New discoveries /developments - Speed of technology transfer - Rates of obsolescence
Environmental
Environmental protection laws - Waste disposal - Energy consumption – food miles/campaigns
Legal - Competition law - Employment law - Health and safety - Product safety
NB PRIORITISE
See VLE for local government example
Industry/Sector Analysis
Michael Porter gives us a useful tool to analyse the relationship between competitors, suppliers and the market…
Use Porter’s Five Forces to assess where risks may arise in the sector.
Porter’s (1980) Five Forces
Which risks matter?
Legal obligations
Ethical responsibilities
Threats that undermine your values
Threats to viability, reputation or commercial success
Threats to long-term sustainability
Different types of risk
Strategic risk (e.g.
This chapter discusses methods for estimating the cost of equity and debt capital for firms and calculating a weighted average cost of capital. It introduces the capital asset pricing model (CAPM) as a method to estimate the cost of equity based on the risk-free rate, market risk premium, and a stock's beta. Determinants of beta like operating and financial leverage are also covered. The chapter then discusses using the WACC to evaluate projects and value firms by discounting cash flows. It concludes by addressing flotation costs associated with raising new capital.
EBITDA and Other Scary Words (SERIES: MBA in a Day 2018)Financial Poise
To view the accompanying webinar, go to: https://www.financialpoise.com/financialpoisewebinars/view-webinar/?id=266162587&slides=N0vp57jbbtWiSr
This webinar explores the ins and outs of financial language and how you can navigate the seeming labyrinth of a language that can sound foreign and in some ways counterintuitive. This webinar teaches the correct use of EBIT, EBITDA and EBITDAR while also dealing with concepts like Cap Rate vs. Capital Cost. This webinar also sheds light on issues with ROI and Payback among other valuation tools and explain what a Cash Conversion Cycle looks like for your business.
(Each question must be a minimum of 200 words)1. If you think .docxhoney725342
The document provides background information on the US wine industry and three companies - Bel Vino Corporation, Starshine Vineyards, and Marriott Corporation. It discusses the structure of the US wine market, trends of growing production and consumption in California, and industry consolidation. It also provides historical financial information and projections for Bel Vino and Starshine to assist with valuation calculations for a potential acquisition.
Reinventing the Record-to-Report Process for Worry-Free Governance, Risk & Co...Proformative, Inc.
Video & Slides: http://www.proformative.com/events/reinventing-record-report-process-worry-free-governance-risk-compliance
Statutory financial reporting and filing has experienced profound change of late. Unrelenting regulatory pressure, shortened deadlines, digital mandates, and accounting complexity make the Record-to-Report (R2R) process extremely expensive, inefficient, and fraught with risk for the Office of the CFO. This educational session will focus on highlighting the current state of the record-to-report process and understanding the expense impact of R2R on the bottom line. It will also show attendees how to identify critical R2R efficiency opportunities while minimizing risk across the financial close, compliance and disclosure management efforts. Lastly, attendees will learn best practices and things to avoid in the R2R process.
Speakers:
Mike Duderich, Finance Director, Americas R2R Operations, Unilever
Ken Fritz, Executive Vice President, Trintech
Presentation delivered at CFO Dimensions 2013 - www.cfodimensions.com
Track: Governance, Risk, Compliance | Session: 1
Structural Design Process: Step-by-Step Guide for BuildingsChandresh Chudasama
The structural design process is explained: Follow our step-by-step guide to understand building design intricacies and ensure structural integrity. Learn how to build wonderful buildings with the help of our detailed information. Learn how to create structures with durability and reliability and also gain insights on ways of managing structures.
What Drives Venture Capital A Perspective From Both S.docxberthacarradice
What Drives Venture Capital?
A Perspective From Both Sides of the Table
Paul Vroomen
*
*
Agenda
Introduction
How Venture Capital WorksThe Impact of Internal Rate of Return Expectations
Case Study: Sandbridge Technologies, Inc.A $15M Powerpoint Presentation
The Future of Venture CapitalBig Changes Coming….
*
Thought Experiment
You are an entrepreneur….You have worked for 10 to 12 hours per day, often 7 days a week for the past 3 years, You have risked your entire personal savings,You have endangered your marriage,You see your kids mostly just before they fall asleep,You have questioned your own sanity,
But, you finally have a working prototype….
*
The Entrepreneur’s View
What??
They want 10X return on their money?They want 65% ownership of my company?They want a controlling vote on the Board of Directors?They want to be paid their money first before anyone else gets anything, even me, the founder, if we sell the company?
Vulture Capitalists!!
*
*
The Venture Capitalists View
This guy has a good idea , BUT:
He has no CEO track record and has never run a company beforeHis executive team has significant holes (especially in marketing)The company’s business plan is way too optimistic, especially given that it has missed critical milestones, twiceThey have one significant customer, but that customer is known for collaborating with innovative start-ups and then doing their own thing
I will ensure that our term sheet enables me to protect my capital and is structured so that I can direct the CEO to correct the issues with the company or replace him with someone that can if he does not!
*
*
The Primary Reason
The Entrepreneur, by definition, is an optimist
The Venture Capitalist, by experience, is a pessimist
The partnership of the two can work, sometimes spectacularly,
if each understands what is driving the other.
*
*
How Venture Capital Firms Work
Venture
Capital
Firm
Managed by
General Partners
Limited Partners
All Accredited
Investors
Investor 1
Investor 2
Investor n
$xM
$yM
$zM
Company 1
Company 2
Company k
Venture Fund
Committed Capital
$(x+y+…+z)
Private Equity
Portfolio
$aM
$bM
$uM
Base+(1-c).Surplus
c.Surplus
Liquidity Event
C = “Carry” = 20% - 35%
Mgt. Fee ~2%p.a.
*
*
EBO and VC Historical Performance
*
Source: US Venture Capital Index and Selected Benchmark Statistics, June 2014, Cambridge Associates, LLC
IRR: Net cash on cash returns to Limited Partners (after deduction of management fees and carry percentages)
AVERAGE IRR (1999-2009)
Electronics: -0.54%
Financial Services: 14.42%
BioTech:16.04%
AVERAGE IRR (1999 -2009)
Information Technology: 24.23%
- Internet-Business:23.2%
- Internet-Commerce:37.8%
Implications of IRR Expectations
Required capital growth to achieve IRR:
To achieve 33% IRR, a $1 investment needs to grow to $7.40 in 7 years.
*Time from investment:5 Years7 Years10 YearsIRR: 25%3.0X4.8X9.3XIRR: 33%4.2X7.4X17.3XIRR: 50%7.6X17.1X57.7X
*
Typical VC Fund Performance ...
This document contains a disclaimer for information presented about valuing lost profits for a start-up company. It notes that the information is intended for general purposes only and should not be considered legal, accounting, or professional advice. It also states that the authors disclaim any liability for loss or risk resulting from the use of the information provided. The material may not be applicable to all circumstances and readers should consult qualified professionals for their specific needs.
Pricing Intellectual Proper Litigation Risk In IP Transactionsbrucelb
This document discusses pricing intellectual property (IP) litigation risk in transactions. It proposes a quantitative, business-focused approach using decision analysis and risk valuation. As an example, it examines how much a contract electronics manufacturer should charge customers to account for IP litigation risk when taking on more design responsibilities. Key factors in evaluating IP litigation risk from different potential plaintiffs are identified and base case estimates are provided for a specific product area. Developing sensitivity analyses on input variables can show their relative impact on expected risk values.
WG Consulting & ZE PowerGroup Lunch and Learn: Presenting a Dodd-Frank Softwa...WG Consulting
During a Lunch and Learn held with one of our esteemed Partners, ZE PowerGroup, our panel of experts discussed the challenges corporations find with Dodd-Frank and presented the software that WG Consulting and ZE PowerGroup built as an answer to those challenges.
This powerpoint represents a semester long consulting project carried out by myself and 4 other students for a local construction management firm named PJ Dick. Our project and presentation involved analyzing PJ Dick\’s proposed new business venture and recommending proper course of action through strategic analysis. This was then presented to the company\’s executive board.
Wipro conducted a strategic management assignment analyzing its business strategy. It included an introduction to Wipro's mission, vision and goals. It then analyzed various demographic, social, PESTEL and SWOT factors. Wipro's business strategy focuses on differentiation through industry depth, portfolio of services and global workforce. It operates in three business segments: global IT services and products, India and Asia Pacific IT services and products, and consumer care and lighting.
This document summarizes a report by CDP (Carbon Disclosure Project) on climate change in 2015. Some key points:
- CDP collected disclosure data on climate change from over 5,500 companies on behalf of 822 institutional investors representing $95 trillion in assets.
- The report analyzes corporate climate actions and emissions data across regions. It identifies companies demonstrating leadership on climate through measures like carbon pricing and low-carbon investment.
- CDP's executive chairman notes that decarbonizing the global economy is an ambitious long-term challenge, but companies are already taking meaningful action and investors are increasingly considering climate risks and opportunities in their portfolios.
This white paper discusses Integrated Project Delivery (IPD), a new project delivery approach that aims to integrate people, systems, structures, and practices into a collaborative process. IPD seeks to bring together owners, architects, engineers, contractors, and other experts very early in design to improve coordination and reduce waste. The paper distinguishes between "IPDish" approaches that use some IPD tools within traditional contracts, and "Pure IPD" which binds the project team contractually with shared risks and rewards. Key aspects of IPD discussed include early involvement of all expertise, team collaboration using tools like BIM from project start, and multi-party agreements that legally connect team members. The paper examines drivers for IPD adoption from
This document provides an overview of the SBIR/STTR programs, which provide $4 billion annually in funding for small businesses to conduct research and development with commercial potential. It summarizes the key aspects of the programs, including the three phases of funding, eligibility requirements for applicants and projects, the differences between SBIR and STTR, and tips for successful applications. BBCetc is an organization that assists companies in winning SBIR/STTR funding and using it to advance their technology development.
This document provides an overview of Chapter 14 on the cost of capital from a finance textbook. It discusses determining a firm's cost of equity, cost of debt, weighted average cost of capital, and how to use these calculations to value a company. The chapter outline lists sections on the cost of equity, debt, preferred stock, weighted average cost of capital, divisional costs of capital, and how WACC is used for company valuation. Key concepts covered include the dividend growth model and SML approach for calculating cost of equity, yield-to-maturity for cost of debt, and the weighted average calculation.
Creating alcohol-free environments to increase productivity and save lives. That is the mission of Boulder, CO-based SOBRSafe, Inc. The company is integrating a preventative detection technology platform through partnership, licensing and acquisitions, and is in protype phase with its launch product: the patented, proprietary SOBRSafe® device - a non-invasive, touch-based identity verification and alcohol detection solution.
It’s no secret that the major reporting regimes – MiFID II, EMIR, MiFIR, REMIT, CSDR, SFTR, FinfraG – have drastically impacted the European financial industry.
The level and volume of new regulations that businesses, firms, providers, and organisations are still adjusting to is only the beginning. Transaction reporting will continue to have a large impact on the infrastructure, resources, and budgets of organisations, providers, firms, and subsidiaries well into the future.
2020 Software Company Benchmark Report - 132 CompaniesKelly Thomas
This is the 2020-1 version. This will be updated regularly throughout the year based on new financials and market cap information.
Benchmark analysis of 132 publicly-traded software companies. Includes growth rates, gross margin, market capitalization, EBITDA, sales and marketing investment, R&D investment, G&A, stock compensation, operating income, revenue per employee, historical analysis, IPO analysis, free cash flow, and cash position, along with market cap correlation analysis and many others.
Lecture 4Evaluation and Mitigation of RisksCrucial considera.docxwashingtonrosy
Lecture 4
Evaluation and Mitigation of Risks
Crucial considerations for your new business venture
Business Planning
1
You & your business idea
Market segments & value proposition
Marketing Strategy
Operations plan
Risk &
strategic options
Financial plan
Resources available
Resources needed
New Venture Creation
Framework
(Burns, 2014)
Last weeks lecture and the first seminar – market segments, value proposition and marketing strategy
This week: operations plan and strategy
2
Lecture Outline
Identifying, Estimating & Mitigating Risk
Legal foundations, Regulatory, and Professional Considerations
People
Definition of Risk
“The possibility that an event will occur and adversely affect the achievement of objectives.”
External (e.g. economic trends, regulations, competition)
Internal (e.g. people, process, infrastructure).
“Identifying, managing, and exploiting risk across an organization has become increasingly important to the success and longevity of any business.”
(PWC, 2008:5)
What if…?
What if?
Micro / macro
5
Identifying, Estimating & Mitigating Risk
The biggest risk…
Successful entrepreneurs are calculated risk takers, not gamblers!!!
SWOT should help...
Strengths, Weaknesses, Opportunities, Threats
But SWOT is not so much a tool for analysis as a set of headings for organising the information garnered from your analysis.
SWOT gets over-used as a substitute for real strategic analysis. Don’t over-rely on it.
Entrepreneurs need to do more strategic analysis than a simple SWOT.
Macro-Environment Analysis - Assessing the Business environment with PESTEL
10
Political -Government stability -Tax policy -Foreign trade regulations- Social welfare policies – EU expansion
Economic - Business cycles - GNP trends - Interest rates - Money supply – Inflation – Unemployment - Disposable income
Sociocultural - Population demographics - Income distribution - Social mobility - Lifestyle changes - Attitudes to work and leisure – Consumerism - Levels of education - Fashion
Technological - Government spending on research - Government and industry focus on technological effort - New discoveries /developments - Speed of technology transfer - Rates of obsolescence
Environmental
Environmental protection laws - Waste disposal - Energy consumption – food miles/campaigns
Legal - Competition law - Employment law - Health and safety - Product safety
NB PRIORITISE
See VLE for local government example
Industry/Sector Analysis
Michael Porter gives us a useful tool to analyse the relationship between competitors, suppliers and the market…
Use Porter’s Five Forces to assess where risks may arise in the sector.
Porter’s (1980) Five Forces
Which risks matter?
Legal obligations
Ethical responsibilities
Threats that undermine your values
Threats to viability, reputation or commercial success
Threats to long-term sustainability
Different types of risk
Strategic risk (e.g.
Lecture 4Evaluation and Mitigation of RisksCrucial considera.docxmanningchassidy
Lecture 4
Evaluation and Mitigation of Risks
Crucial considerations for your new business venture
Business Planning
1
You & your business idea
Market segments & value proposition
Marketing Strategy
Operations plan
Risk &
strategic options
Financial plan
Resources available
Resources needed
New Venture Creation
Framework
(Burns, 2014)
Last weeks lecture and the first seminar – market segments, value proposition and marketing strategy
This week: operations plan and strategy
2
Lecture Outline
Identifying, Estimating & Mitigating Risk
Legal foundations, Regulatory, and Professional Considerations
People
Definition of Risk
“The possibility that an event will occur and adversely affect the achievement of objectives.”
External (e.g. economic trends, regulations, competition)
Internal (e.g. people, process, infrastructure).
“Identifying, managing, and exploiting risk across an organization has become increasingly important to the success and longevity of any business.”
(PWC, 2008:5)
What if…?
What if?
Micro / macro
5
Identifying, Estimating & Mitigating Risk
The biggest risk…
Successful entrepreneurs are calculated risk takers, not gamblers!!!
SWOT should help...
Strengths, Weaknesses, Opportunities, Threats
But SWOT is not so much a tool for analysis as a set of headings for organising the information garnered from your analysis.
SWOT gets over-used as a substitute for real strategic analysis. Don’t over-rely on it.
Entrepreneurs need to do more strategic analysis than a simple SWOT.
Macro-Environment Analysis - Assessing the Business environment with PESTEL
10
Political -Government stability -Tax policy -Foreign trade regulations- Social welfare policies – EU expansion
Economic - Business cycles - GNP trends - Interest rates - Money supply – Inflation – Unemployment - Disposable income
Sociocultural - Population demographics - Income distribution - Social mobility - Lifestyle changes - Attitudes to work and leisure – Consumerism - Levels of education - Fashion
Technological - Government spending on research - Government and industry focus on technological effort - New discoveries /developments - Speed of technology transfer - Rates of obsolescence
Environmental
Environmental protection laws - Waste disposal - Energy consumption – food miles/campaigns
Legal - Competition law - Employment law - Health and safety - Product safety
NB PRIORITISE
See VLE for local government example
Industry/Sector Analysis
Michael Porter gives us a useful tool to analyse the relationship between competitors, suppliers and the market…
Use Porter’s Five Forces to assess where risks may arise in the sector.
Porter’s (1980) Five Forces
Which risks matter?
Legal obligations
Ethical responsibilities
Threats that undermine your values
Threats to viability, reputation or commercial success
Threats to long-term sustainability
Different types of risk
Strategic risk (e.g.
This chapter discusses methods for estimating the cost of equity and debt capital for firms and calculating a weighted average cost of capital. It introduces the capital asset pricing model (CAPM) as a method to estimate the cost of equity based on the risk-free rate, market risk premium, and a stock's beta. Determinants of beta like operating and financial leverage are also covered. The chapter then discusses using the WACC to evaluate projects and value firms by discounting cash flows. It concludes by addressing flotation costs associated with raising new capital.
EBITDA and Other Scary Words (SERIES: MBA in a Day 2018)Financial Poise
To view the accompanying webinar, go to: https://www.financialpoise.com/financialpoisewebinars/view-webinar/?id=266162587&slides=N0vp57jbbtWiSr
This webinar explores the ins and outs of financial language and how you can navigate the seeming labyrinth of a language that can sound foreign and in some ways counterintuitive. This webinar teaches the correct use of EBIT, EBITDA and EBITDAR while also dealing with concepts like Cap Rate vs. Capital Cost. This webinar also sheds light on issues with ROI and Payback among other valuation tools and explain what a Cash Conversion Cycle looks like for your business.
(Each question must be a minimum of 200 words)1. If you think .docxhoney725342
The document provides background information on the US wine industry and three companies - Bel Vino Corporation, Starshine Vineyards, and Marriott Corporation. It discusses the structure of the US wine market, trends of growing production and consumption in California, and industry consolidation. It also provides historical financial information and projections for Bel Vino and Starshine to assist with valuation calculations for a potential acquisition.
Reinventing the Record-to-Report Process for Worry-Free Governance, Risk & Co...Proformative, Inc.
Video & Slides: http://www.proformative.com/events/reinventing-record-report-process-worry-free-governance-risk-compliance
Statutory financial reporting and filing has experienced profound change of late. Unrelenting regulatory pressure, shortened deadlines, digital mandates, and accounting complexity make the Record-to-Report (R2R) process extremely expensive, inefficient, and fraught with risk for the Office of the CFO. This educational session will focus on highlighting the current state of the record-to-report process and understanding the expense impact of R2R on the bottom line. It will also show attendees how to identify critical R2R efficiency opportunities while minimizing risk across the financial close, compliance and disclosure management efforts. Lastly, attendees will learn best practices and things to avoid in the R2R process.
Speakers:
Mike Duderich, Finance Director, Americas R2R Operations, Unilever
Ken Fritz, Executive Vice President, Trintech
Presentation delivered at CFO Dimensions 2013 - www.cfodimensions.com
Track: Governance, Risk, Compliance | Session: 1
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Industrial Tech SW: Category Renewal and CreationChristian Dahlen
Every industrial revolution has created a new set of categories and a new set of players.
Multiple new technologies have emerged, but Samsara and C3.ai are only two companies which have gone public so far.
Manufacturing startups constitute the largest pipeline share of unicorns and IPO candidates in the SF Bay Area, and software startups dominate in Germany.
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years in a row, the Labrador Retriever has dropped to second place
in the American Kennel Club's annual survey of the country's most
popular canines. The French Bulldog is the new top dog in the
United States as of 2022. The stylish puppy has ascended the
rankings in rapid time despite having health concerns and limited
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How to Implement a Real Estate CRM SoftwareSalesTown
To implement a CRM for real estate, set clear goals, choose a CRM with key real estate features, and customize it to your needs. Migrate your data, train your team, and use automation to save time. Monitor performance, ensure data security, and use the CRM to enhance marketing. Regularly check its effectiveness to improve your business.
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This letter, written by Kellen Harkins, Course Director at Full Sail University, commends Anny Love's exemplary performance in the Video Sharing Platforms class. It highlights her dedication, willingness to challenge herself, and exceptional skills in production, editing, and marketing across various video platforms like YouTube, TikTok, and Instagram.
HOW TO START UP A COMPANY A STEP-BY-STEP GUIDE.pdf46adnanshahzad
How to Start Up a Company: A Step-by-Step Guide Starting a company is an exciting adventure that combines creativity, strategy, and hard work. It can seem overwhelming at first, but with the right guidance, anyone can transform a great idea into a successful business. Let's dive into how to start up a company, from the initial spark of an idea to securing funding and launching your startup.
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Have you ever dreamed of turning your innovative idea into a thriving business? Starting a company involves numerous steps and decisions, but don't worry—we're here to help. Whether you're exploring how to start a startup company or wondering how to start up a small business, this guide will walk you through the process, step by step.
3 Simple Steps To Buy Verified Payoneer Account In 2024SEOSMMEARTH
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The global retail industry has weathered numerous storms, with the financial crisis of 2008 serving as a poignant reminder of the sector's resilience and adaptability. However, as we navigate the complex landscape of 2024, retailers face a unique set of challenges that demand innovative strategies and a fundamental shift in mindset. This white paper contrasts the impact of the 2008 recession on the retail sector with the current headwinds retailers are grappling with, while offering a comprehensive roadmap for success in this new paradigm.
Welcome to what I think is an interesting topic – and probably even a controversial one at that.
*** The Implied Company Pricing Line & Model ***
Maybe you’ve already read something about this … watched one of our webinars … or seen a previous presentation.
Ask for show of hands if you’ve watched one of our webinars or read on of our papers.
No matter how you feel or how much you know about the topic, I hope you will leave here today with some useful information.
A rogues gallery if I’ve ever seen one!
So, why ARE we here today? Sometimes, we feel this way!
And we’re here to annoy you … about the BUM and a few other generally accepted BV practices.
I used to hate testifying about how I developed my discount rate.
First, you start with the Rf rate … then you add this … then you add that.
No one thinks that way about a rate of return – accept academics.
In the land of the blind, the one eyed man is king.Erasmus of Rotterdam, circa 1510
Caveat: Could use for minority valuations … with minority CFs … but would need incremental/additional adjustment for DLOM
For y’all here today, I’ve got 4 learning objectives.
The pitfalls are part and parcel of “generally accepted BV practices.”
And, frankly, are problems for most BV assignments.
Worse, we know the following issues to be true.
Chart from Gary Truman
Duff & Phelps would agree
So it’s really NOT the cost of equity as if our subject company were publicly traded.
We need to adjust the numbers for unsystematic risk, illiquidity and, perhaps, tax effects.
If the SSP exists, why stop extrapolating at 12%?
Is the SSP capturing something else, e.g., illiquidity?
Chart prepared/created by Toby Tatum
Note: 10z Size Premium is 12.12% at 12/31/13 and 11.98% at 12/31/14.
For Rod: Log - 4 = $10,000 ; 6 = $1 million; 8 = $100 million; 10 = $10 billion; 12 = too big to fail!
Both cases are from Delaware Chancery Court – Open MRI, April 2006; Gesoff, May 2006.
And to be fair, there have been many cases that have accepted a subjective CSRP.
Damodaran on illiquidity …
Also, this: The trading costs associated with buying and selling a private business can range from substantial to prohibitive, depending upon the size of the business, the composition of its assets and its profitability. There are relatively few potential buyers and the search costs (associated with finding these buyers) will be high. In fact, if the investor buying it from you builds in a similar estimate of transaction costs she will face when she sells it, the value of the asset today should reflect the expected value of all future transactions cost to all future holders of the asset.
Two BUM supporters; much different conclusions for a control valueOur ongoing surveys of BUM supporters prove unreliability
With all of the previous issues – there are no “how to” instructions for dealing with a control valuation.
IPCPL is agnostic on these issues – it’s ALL baked into the private company transaction data.
Regression points for $1-20 million revenue and every $5 million after that.
Probability neutral - just as much chance things will turn out better/worse than this forecast.
Two different company forecasts may have equal chance of occurring, but one could have a higher std dev require higher discount rate.
Note: Risk adjusting is modeling the CSR in the CF forecasts.
Tests:
Pepperdine: COE is 22% on deals levered more that 2 to 1.
Hitcher: If you take D&P COE data and merge with 30% debt and cost of debt, you’re close to IPCPL IRR.
BVR: Russian guy testing IPCPL model (Igor ???? – physics and economics background) finds model to be ok, Grabowski one of the reviewers.
Capital structure: Best possible prices have optimal capital structure/cost of debt; with BUM, have to assume a capital structure … or which unlevering/relevering formula to use.
Pratt’s Stats MVIC excludes cash, even in stock deals.
Thus, only add back cash that can’t earn interest, e.g., cash in cash registers.
All available dates? – same as new BVR paper
No medical/dental practices (compensation [separating business value & labor value] and financial report issues), but IPCPL can be used to value them? – S&P 500 has utilities in it, but we don’t value utilities.
Why only private buyers of private companies? – see later slide
Just like assembling a portfolio of diversified stocks reduces risk, the more transactions the lower the potential error created by any errors/noise in the data.
Ex. – given a starting Ko of 20%, a 1% increase in g would result in new Ko of 19.5%.
Not a 1 for 1 effect because increased g requires higher reinvestment in NWC and Capex.
Net result of adjustments not a material issue
Present Day – 20 years … inflation different … ERP different change to “today”
Also note: stock sales v. asset sales – not a statistically significant difference
Stock sales occur when g is slightly higher, so Price/Sales slightly higher
Updated May 11, 2015
Updated May 11, 2015
$150 million revenue
Cost of capital determined using 3 factor Fama-French model
Note that average company has no net debt
Adjusted for costs of going/staying public
Rule asserts that two securities that provide the same future cash flow and have the same level of risk must sell for the same price.
10% of the first million dollars involved in the transaction
8% of the second million
6% of the third million
4% of the fourth million
2% of everything thereafter
Regression points for $1-20 million revenue and every $5 million after that.
Output updated May 11, 2015
Practical example – IF your company is average
If you don’t like Pratt’s Stats or are uncomfortable with IPCPL … IBs/Mercer use 5x ebitda multiple rule of thumb
Pepperdine 22% COE with debt = IPCPL results
Toby Private Enterprise Pricing Model – uses BizComps … separately for each major SIC code
We realize that IPCPL may be “out there” from some of you.
That’s why we created IPCPM, which is a calibration tool you can use as a sanity check on your BUM.
We put calibrator output in our reports
What is average? Your idea is different than mine … which makes results subjective.
Thus, the calibrator is like having a cost of capital expert helping you in the background to avoid the BUM pitfalls.
Note that there is a downloadable manual on the website.
We don’t know how to move off the curve – to extent we’re not average, we have to guess.
But not quite similar to how we guess at CSRP.
With IPCPL, we are starting in the realm of small private companies so these adjustments are not a hug leap of faith.
But with BUM, we are starting with large public companies … who knows what the adjustment should be?
Factors are percentiles
Note: Avg IPCPL company (“5”) has beta of 1.25
The systematic risk and unsystematic risk factors assume a 50-50 wt between beta and total beta (at the smaller sizes and escalates to a proportionately higher beta wt as size increases) - so just like TB this is a more scientific approach.
Factors are percentiles
Note: Avg IPCPL company (“5”) has total beta of 3.38
Assume marginal (price-setting) investor purchase of private company will represent ½ of net worth
The systematic risk and unsystematic risk factors assume a 50-50 wt between beta and total beta (at the smaller sizes and escalates to a proportionately higher beta wt as size increases) - so just like TB this is a more scientific approach.
Factors are percentiles
Note: Avg IPCPL company (“5”) has illiquidity of 0
Factors are percentiles
Note: Avg IPCPL company (“5”) has debt/capital ratio of 0.33
With all of these adjustments:
It's judgmental based on the dispersion of the transaction data and our experience with M&A - We do not want to say it's anything more scientific than that. IPCPM was developed for people who wanted to be able to subjectively move off the curve with our help.
We have experimented with the percentile inputs and calibrated them to get reasonable results based on the data and our experience in M&A - it's nothing more scientific than that.
Greater than +10% too high
Within +/- 10% acceptable
Less than -10% too low
Greater than +10% too high
Within +/- 10% acceptable
Less than -10% too low
Greater than +10% too high
Within +/- 10% acceptable
Less than -10% too low
If you do what you’ve always done, you’ll get what you’ve always gotten.
IPCPL: One answer for ALLIPCPM: Deviation much tighterBUM: Deviation could be 2x