Exam 16: Planning for Growth and Change

The ____ method is probably the technique most commonly used to account for the going-concern value of a business, but it has problems as well. ​

Any investment deal includes all of the following components, except ____. ​

A VC may request a ____, a penalty requiring founders to give up some of their stock to the VC if the company does not achieve its projected performance goals. ​

The value derived by assuming the sale of all assets and calculating the amount that could be recovered from doing so is the ____ value. ​

Nearly all valuation techniques rely on the analysis of the future market for the company's products.

An antidilution provision ensures that the selling of stock at a later date will increase the economic value of the venture capitalist's investment.

Venture capital firms in an early-stage investment characteristically demand a higher rate of return, as much as ____ percent or more annual cash-on-cash return, whereas a later-stage investment demands a lower rate of return, perhaps ____ percent annually.

Briefly discuss due diligence as it pertains to the sequence of events in securing venture capital from a VC firm. ​

List the main types of risk adjustment factors that influence the discount rate.

A form of startup capital managed by professionals is ____.

____ take an equity position through ownership of stock in the company. ​

Which industries have the highest venture capital investment? ​

A factor affecting the final valuation of the business is the degree of ____ that the owner has over the business. ​

Following the IPO registration statement, an advertisement called a "tombstone" announces the offering in the financial press.

Entrepreneurs typically get startup capital from:

VCs often want both equity and debt - equity because it gives them an ownership interest in the business, debt because they will be repaid more quickly.

What are the four components of an investment deal?

The price at which a willing seller would sell and a willing buyer would buy in an arm's-length transaction is the ____ value.

Bootstrapping refers to: ​

Comparable companies are those that are similar to the new venture in value characteristics such as risk, rate of growth, capital structure, and the size and timing of cash flows.