Playbook Tetuan Valley Startup School for Dummies - July 2012 [2nd Edition]
Tetuan Valley Startup School V - Fall 2011 - Week 3
-
Upload
luis-rivera-gurrea-nozaleda -
Category
Business
-
view
583 -
download
1
description
Transcript of Tetuan Valley Startup School V - Fall 2011 - Week 3
![Page 1: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/1.jpg)
Tetuan alley
Tetuan Valley, October 2011
Startup School Fall 2011
This is the Land of Do-as-you-please-and-take-what-you-want Week 3
![Page 2: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/2.jpg)
Sponsors Collaborators
![Page 3: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/3.jpg)
Finance for Entrepreneurs
11/3/11
Objec3ve
Introduce students with tehcnological backgrounds to key financial concepts that are esen;al at the hour of star;ng a business Result
• Comprehension of key financial indicators • Ability to parameterize the models given the face value of a startup and to make financial projec;ons to investors Dura3on
2 sessions, 4hr
Session 1 • Concepts • Principals • Equa;ons • Investors; Objec;ves and restric;ons, stages, “Venture Capital” and
Value Levers • Conclusions for the entpreneur
Session 2 • Business Plan • Price • Business Model • Other tools
![Page 4: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/4.jpg)
11/3/11 4
TIME VALUE OF MONEY Effect of compound interest
“A bird in the hand is worth two in the bush”
=
![Page 5: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/5.jpg)
11/3/11 5
DIVERSIFICATION Market vs. Company Risk
“Don´t put all your eggs in one basket”
![Page 6: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/6.jpg)
11/3/11 6
PRICE OF RISK Correla;on of Risk & Return
“There´s no such thing as a free lunch”
![Page 7: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/7.jpg)
11/3/11
Time value of money
Diversifica3on
Price of risk (Sharpe ra3o)
Effect of compound interest “A bird in the hand is worth two in the bush”
Market vs. Company Risk “Don´t put all your eggs in one basket”
Correla;on of risk & return “There´s no such thing as a free lunch”
IN GRAPHS
![Page 8: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/8.jpg)
11/3/11
BALANCE SHEET
STATEMENTS OF ANY COMPANY
![Page 9: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/9.jpg)
11/3/11
RELATIONSHIP BETWEEN ACCOUNTS
![Page 10: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/10.jpg)
11/3/11 10
Company with increasing profits
![Page 11: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/11.jpg)
11/3/11 11
But if the same company sells with a difference of payments above 5 months the company can go bankrupt
-‐100
0
100
200
300
400
500
600
700
Year 1 Year 2 Year 3 Year 4
MargenCobrosPagosCaja
Margin
Collec;ons
Payments
Cash balance
![Page 12: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/12.jpg)
11/3/11
PROFIT AND LOSS
Earnings
COGS
Overhead Expenses
EBITDA
Deprecia;ons and amor;za;ons
Contribu3on Margin
EBIT
Financial result
EBT
Taxes
Net Result
+
-‐
-‐
-‐
-‐
![Page 13: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/13.jpg)
11/3/11 13
CASH FLOW STATEMENT
Collec;bles
Payments (Direct / Overhead)
Opera3ng Cash -‐
Annual Cash Balance
Investments
Temporary financial earnings
Investment Cash
-‐ +
Capital Subscrip;ons
-‐ New Debt
Principal of debt
Dividends
Financial Cash
-‐
+
![Page 14: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/14.jpg)
11/3/11
Ac3ve à where is my money Passive à where does it come from
Long-‐Term Outside Capital
Tangible Equity Long-‐Term Assets
Short-‐Term Assets
Short-‐Term Outside Capital
Working Capital
BALANCE SHEET
Investments Deprecia3ons
Debt Treasury Inventory
Creditors Short-‐term bank VAT
Banks
Social Capital Net Results Earnings
![Page 15: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/15.jpg)
11/3/11
Price is what you pay. Value is what you get Warren Buffea
94 M EUR
VS
1 M Tshirt+ 1st liga
![Page 16: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/16.jpg)
11/3/11 16
Earnings Expenses EBITDA Amort. EBIT T in EBIT Varia3on WC
CAPEX FCF
FCF: what is it?
l CAPM: r% = α + βp = Rf +(β*MRP) l WACC= Ke * (E / (D+E)) + Kd (D / (D+E)) l FCF = Net income + deprecia;on – changes in working capital
– Capital expenditures
NOPLAT Amort.
![Page 17: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/17.jpg)
11/3/11
Brokers
Family offices SICAVs
CVC
Private Banking
Insurance & Pension Funds
Funds of Funds Investment
Banking
Angel Funds
Hedge Funds
Comercial Banks
Grants and Subsidies
Endowments
¿? Sovereign Funds
WHO IS WHO
![Page 18: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/18.jpg)
Involvement
Financial Purity
Industrialists
Venture Capital
Friends and
family
Business Angels
Family Office
Own Money
Others Money
Funds Origin 3
2
1
Source: Perennius
HOW PLAYERS INVEST
![Page 19: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/19.jpg)
11/3/11
INVESTMENT STAGES
![Page 20: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/20.jpg)
THE CHASM
![Page 21: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/21.jpg)
Why they Invest What they Measure Decision Time
Family, Friends and Fools Confidence Personal
Commitment Fast
Subsidies and Public Assistence
Policy alignments
Compliance merits Slow
Business Angels Personal affinity Profitability Fast
Venture Capitalists Investment criteria Profitability Slow
Industrial Partners Strategic criteria Contribu;on to business Slow
Source: HighGrowth; Elaboración Okuri Ventures
INVESTMENT CRITERIA
![Page 22: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/22.jpg)
11/3/11
Target yearly return
Holding period (years)
Investment death rate
Entry/exit mul3plier
25%+ 3-‐5 <20% x3,5
25%+ 3-‐5 >60% x10+
PE
VC
15%+ 4-‐7 >80% x20+ BA
DESIRED RETURN
![Page 23: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/23.jpg)
0
5
10
15
20
25
Sales Margin Debt Arbitration Total
11/3/11
Shareholder Return
Investment Mul3plier
PE
VC
Source: Cifras orientaGvas
ORIGIN OF MULTIPLIERS-‐LEVERS
![Page 24: Tetuan Valley Startup School V - Fall 2011 - Week 3](https://reader033.fdocuments.net/reader033/viewer/2022060107/554c13fcb4c905ec518b4bc3/html5/thumbnails/24.jpg)
11/3/11
1 / (1-‐n) Source: http://www.paulgraham.com/equity.html
CONCLUSION