MBA (How do I protect my IP (intellectual property)? (TM (Trademark),…
How do I protect my IP (intellectual property)?
1K - 100K
Last < 1 year
Most important investment charactistic
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
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
Who owns your stuff
Liabilities + Equity
What you own
: $ total stuff we sold
: $ amount it took us to sell the stuff
A - B
= Net Income
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
Measure our ability to pay short term debt
Are we liquid enough to get a loan?
Current assets/current liabilities
The quick ratio
(current assets - inventory)/current liabilities
Debt to total assets
Interest coverage ration
Return on assets
Return on equity
Class 7: Managing cash flow
Forecasting + Budgeting
Forecasting is based on one rule
All forecasts are based on % of sales
Public companies forcast quarterly
Start ups forecast monthly
Survival is the goal
All successful entities have budget forcasts
The ethics of forecasting
conservative and honest
How can we measure how long it takes for assets and liabilities to turn into cash?
Cash conversion period ratio
Inventory/average daily COGS
$5000/$100 = 50
Inventory to sale conversion period
How can we track how long it takes to get cash from selling something on credit?
Sale to cash conversion period
Pay bills as late as possible
Purchase to payment conversion period
Average payables + average accrued liabilities/COGS/365
How to network
How to present
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
Give them an experience
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)