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MBA (How do I protect my IP (intellectual property)? (TM (Trademark),…
MBA
How do I protect my IP (intellectual property)?
TM
Trademark
Patents
Cost
1K - 100K
Last < 1 year
R
Registered Trademark
Copyright
Venture capital
Most important investment charactistic
Management
The jockey is more important than the horse
VC Capital raising and terms
What returns do they look for?
5 x 5
500% return in 5 years
What about valuation?
Ask this question
Will this company be more relevant in 5 years?
How to pitch
Prepare 3 pitches
30 seconds
5 minutes
30 minutes
Sell yourself: nothing is more important
Discuss what is different about your product
Be able to discuss competition and market
Have basic financials ready for discussion
Who are your parents, investors and advisors?
Show the product right away
Keep it simple. Be passionate Be interested!
Less is more
Accounting and Finance
Class 6: Financial analysis
Terms
Balance Sheet
Who owns your stuff
Assets
Liabilities + Equity
What you own
Income statement
A
: $ total stuff we sold
B
: $ amount it took us to sell the stuff
A - B
= Net Income
Financial ratios
Why do we care about this?
1: So equity investors can decide to invest or they can assess investment performance
2: So lenders can decide to lend or they can assess loan performance
3: So business owners can track performance
Cash burn
Liquidity ratios
Meaning
Measure our ability to pay short term debt
Are we liquid enough to get a loan?
Current ratio
Current assets/current liabilities
The quick ratio
(current assets - inventory)/current liabilities
Leverage ratios
Debt to total assets
Debt/assets
Interest coverage ration
EBITDA/interest
Return on assets
Net income/assets
Return on equity
Net income/equity
Class 7: Managing cash flow
Forecasting + Budgeting
Forcasting
Forecasting is based on one rule
All forecasts are based on % of sales
Public companies forcast quarterly
Start ups forecast monthly
Why?
Survival is the goal
All successful entities have budget forcasts
The ethics of forecasting
Always be
conservative and honest
with forecasts
How can we measure how long it takes for assets and liabilities to turn into cash?
Cash conversion period ratio
Inventory/average daily COGS
Example
$5000/$100 = 50
Inventory to sale conversion period
Average inventories/COGS/365
How can we track how long it takes to get cash from selling something on credit?
Sale to cash conversion period
average receivables
/
sales
/
365
Pay bills as late as possible
Purchase to payment conversion period
Average payables + average accrued liabilities/COGS/365
How to network
LinkedIn
Business presentations
How to present
Tips
Less is more
Keep it simple
The medium is the message
Passionate and inspire
Practice. Practice. Practice
Have fun when presenting
Marketing is theatre
Metaphor. Metaphor. Metaphor
Props. Give them something they can touch
Inform. Educate. Entertain
Powerful Presentations
Marshall
Bill
Experiential
Give them an experience
Imop
Class 9: Projecting financial statements
How to build financial statements
Project at least 3 - 5 years into the future
Pro forma = projections
Always start with sales projections
What is the most important thing to assess for a potential investment in a start-up?
The management team
The TAM (Total adjustable market)