北大光华各种经济学课件eft1

GuanghuaSchoolofManagement，PekingUniversity，WangDong主讲人：王东

北京大学光华管理学院2号楼316

室电话/传真:（86-10）6275-4817电邮：wangdong@[创业投资

]

ENTREPRENEURIALFINANCE©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong2Chapter1

IntroductiontoEntrepreneurialFinance创业投资概论©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong3DefiningEntrepreneurialFinanceEntrepreneurship:

“Therelentlesspursuitofopportunitywithoutregardtotheresourcescurrentlycontrolled”Finance:

“Thestudyoftheallocationofcashandriskwiththegoalofcreatingvaluefortheenterprise”EntrepreneurialFinance:

“Thestudyabouthowtomanagecashandrisktocreatevalueintherelentlesspursuitofopportunity”

Chapter1Source:HowardStevenson,HBS

©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong4InvestmentDecisionsFinancingDecisionsMixedDecisionsTypesofFinancialDecisionsChapter1©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong5Whoistheentrepreneur?CreativityAndInnovation

Chapter1Reference:JeffryTimmons“NewVentureCreation”LowHighHighGeneralmanagementskills,businessknow-how,andnetworks

Inventor

Entrepreneur

Promoter

Manager/Administrator©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong6Chapter1©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong7TheObjectiveoftheTeamChapter1MaximumValuefortheEntrepreneur©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong8Chapter2

EntrepreneurshipandInnovation

创业与创新©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong9Chapter6AModelofTheFirmCashAmplifierCashFutureCashFirmCapitalAmplifierInventory/Service©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong10Chapter6TheCashFlowofaBusinessVentureFixedAssetsCapital(equityanddebt)InfusionsCashExpendituresEmployeesMaterialsProductionInventory/ServiceFutureCashEquityReturnsDebtServiceTaxesCashsalesAccountsReceivableCreditSalesCollectionsReinvestment(toretainedearnings)©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong11Terminationsasapercentofstart-upsTerminationswithlosstocreditorsasapercentofstart-upsSource:Case,J.,"TheDarkSide"Inc.Magazine,1997,/incmagazine/archives/27960801.html,basedonTheStateofSmallBusiness:AReportofthePresident,1994,U.S.GovernmentPrintingOffice,Washington,D.C.,1995.NewBusinessFormations&Terminations©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong12Chapter3

EnterpriseRiskManagement

创业企业风险管理©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong13DevelopmentStageStart-upEarlyGrowthRapidGrowthExitStagesofNewVentureDevelopment

Chapter2©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong14TimeDollarsRevenueNetIncomeCashFlow00DevelopmentStart-upEarlyGrowthRapidGrowthExitFigure1-2StagesofNewVentureDevelopment

Chapter2©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong15TheFinanceParadigmCashisthemostimportantresource

–Morecashisbetterthanlesscash–CashnowisbetterthancashlaterPresentwealthispreferredtofuturewealth.Safeassetsarepreferredtoriskyassets.Moreofagoodispreferredtoless.Chapter1©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong16CaveatsInvestmentvalueisnottheonlyfactoranentrepreneurorinvestorcanconsider.TheCAPM-basedvaluationmodelsusedinthebookdonotfullydescribehowinvestorsviewrisk.Riskandexpectedreturncanbeestimated,butnotmeasuredwithprecision.Noteverynewventureinvestmentorfinancingdecisionshouldbecarefullymodeledandevaluated.Chapter1©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong17战略风险财务风险市场风险运营风险信用风险法律风险等创业企业风险Chapter1©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong18Chapter4TheFrameworkof

NewVentureValuation创业企业价值评估©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong19ValuationChapter4

内部与外部价值评估

（万元）

创业者客观预测投资者相信创业者投资者不相信创业者10050©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong20ValuationChapter4

内部与外部价值评估

（万元）

创业者客观预测创业者夸大预测投资者相信创业者投资者不相信创业者1001505075©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong21StrategicPlanningPartnershipformationanddissolutionInitialpublicoffering(IPO)StockoptionsandEmployeestockownershipplans(ESOPs)MezzaninefinancingNegotiatingamergerorsaleofaventureTheManyUsesofValuationChapter4©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong22Beautyisintheeyeofthebeholder.Thefutureisanybody’sguess.Investorsinnewventuresdemandveryhighexpectedratesofreturntocompensatefortherisks.Theoutsideinvestordetermineswhattheventureisworth.ValuationMythsChapter4©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong23LearningObjectivesKnowthedifferencebetweena“hurdlerate”andarealizedrateofreturn.Knowwhyhurdleratesfornewventuresusuallyarehigherthanrealizedratesofreturn.Knowthedifferencebetweenahurdlerateandtheopportunitycostofcapital.KnowhowtousetheCapitalAssetPricingModeltoestimatecostofcapital.Knowhowtousetherisk-adjusteddiscountrateandcertaintyequivalentformsoftheCAPM.Chapter4©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong24LearningObjectives(continued)KnowthelimitationsoftheCAPMfornewventurevaluationKnowthedifferencesbetweentheCAPMandtheOptionPricingModelandbeabletoreconciletheiruse.Knowhowdiversifiableriskaffectsexpectedreturns.Knowwhythevaluationoftheentrepreneurislikelytobedifferentfromthatoftheinvestor,andhowtousetheinformationindealnegotiation.Chapter4©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong25HurdleRatesForVentureCapitalChapter4©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong2614%-92firmsin‘60sand‘70s.23%-beforefees,100firmsinthe‘60s16%-publicfundstockreturnsfrom1959to1985.27%-11firmsfrom1974to1979.13.5%-from1974to1989.20.7%-from1987to1996.Howarethehurdleratesreconciledwithrealizedrates?VentureCapitalRealizedRatesofReturn(basedonvariousstudies)EntrepreneurialFinance,SmithandKiholmSmithChapter4©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong27ValuationMethodsValue=PresentvalueoffuturecashflowsValueTwoconceptuallyequivalentapproachesThechoiceofmethoddependsoninformationavailability.

RADR-Risk-AdjustedDiscountRate

CEQ-CertaintyEquivalentCashFlowChapter4RealOption©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong28MeasuresofCashFlowExpectedActualCashFlowOperatingCashFlow

OperatingCashFlow=EBIT+DepreciationExpense-CapitalExpenditures-IncreaseinNWCCashFlowtoAllInvestors(bothstockholdersandcreditors) TotalCapitalCashFlow+EBIAT=OperatingCashFlow-ActualTaxesCashFlowtoCreditors(expectedinlightofdefaultrisk,potentialprepayment,potentialadditionalborrowing) DebtCashFlow=ExpectedInterestPayments+ExpectedNetDebtServiceCashFlowtoStockholders(expectedinlightofexpectedcashflowstocreditors) EquityCashFlow=OperatingCashFlow-ExpectedInterestPayments- ExpectedNetDebtService-ExpectedActualTaxesOtherMeasuresofCashFlowContractualCashFlowtoCreditors(assumingnodefaultorprepayment) ContractualCashFlowstoCreditors=ContractualInterestPayments+ContractualNetDebtServiceUnleveredFreeCashFlow(expectedifnodebtfinancing) UnleveredFreeCashFlow-OperatingCashFlow-TheoreticalTaxesasUnlevered©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong29MatchingCashFlowstoDiscountRatesforVariousFinancialClaimsFigure8-6Chapter4©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDongAnIntroductiontoOptionsOption-ArighttomakeadecisioninthefutureElementsofanoptionAnunderlyingassetExerciseprice(strikeprice)ExpirationdateEuropeanorAmericanformRiskfreerateBasicoptionsCalloptionPutoptionFinancialoptionsRealoptionsComplexoptionsContingencies-OptioncreatedbysomeearlieractionInterdependencies-OptionswithinterdependentvaluesChapter4©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong31OptionsAcall

isanoptionto BUY

acertainasset

byacertaindate

foracertainpriceAput

isanoptionto SELL

a certainasset

bya certaindate

fora certainprice1973年股票期权交易©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong32Forwards

vsOptionsAforwardcontract

givestheholder

theOBLIGATION

tobuyorsell atacertainpriceAnoption

givestheholder

theRIGHT

tobuyorsellatacertainprice©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong33Options

合约中的价格——

执行价格

exercisepriceorstrikeprice合约中的日期——

到期日，执行日，期满日expirationdata,exercisedate,maturity美式期权

Americanoptions

可以在期权有效期内任何时候执行。欧式期权

Europeanoptions

只能在到期日执行交易中多数是美式期权©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong34Long

Call

onIBMProfitfrombuying100IBMEuropeancall

option:optionprice=$5,strikeprice=$100,spotprice=$98,T=2month

Figure1.2

3020100-5708090100110120130Profit($)Terminalstockprice($)©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong35Long

Put

onExxonProfitfrombuying

anExxonEuropeanput

option:optionprice=$7,strikeprice=$70Figure1.3

3020100-7706050408090100Profit($)Terminalstockprice($)©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong36Short

Call

onIBMFigure1.4(p.9)

Profitfromwriting

anIBMEuropeancall

option:optionprice=$5,strikeprice=$100-30-20-1005708090100110120130Profit($)Terminalstockprice($)©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong37Short

Put

onExxonFigure1.5(p.9)

Profitfromwriting

anExxonEuropeanput

option:optionprice=$7,strikeprice=$70-30-20-1070706050408090100Profit($)Terminalstockprice($)©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong38PayoffsfromOptionsFigure1.6(p.8),

X-Strikeprice,ST

-Priceofassetamaturity

longcall(看涨期权多头)shortcall(看涨期权空头）

longput(看跌期权多头）shortput(看跌期权空头）PayoffPayoffSTSTXXPayoffPayoffSTSTXX©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong39Put-CallParityOptionPricingModelsbasedonno-arbitrageStock+Put=Call+PV(ExercisePrice)RoleofcompletemarketsFinancialOptionsCompletemarketsIncompletemarketsRealOptionsCompletemarketsIncompletemarketsComplexRealOptions(RainbowOptions)DiscretescenariosSimulationChapter4ValuingOptions©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong40Defer-Investingnoweliminatestheoptiontodefer(learning).Expand-Anoptiontodeferpartofthescaleofinvestment.Contract-Theflexibilitytoreducetherateofoutput.Abandon-Stopinvesting,andliquidateexistingassets.Staging-Substituteaseriesofsmallinvestmentsforonelarge.Switching-Re-deployresourcesorchangeinputs(terminate).ChangeScope-Expandorcontractscope.Chapter4RealOptions-SomeExamples©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDongChapter4ExtendingbrandnamestonewproductsormarketingthroughexistingdistributionchannelsDeferExpandorcontractAbandonSwitchinputsoroutputsGrowTowaitbeforetakinganactionuntilmoreisknownortimingisexpectedtobemorefavorableToincreaseordecreasethescaleofaoperationinresponsetodemandTodiscontinueanoperationandliquidatetheassetsTocommitinvestmentinstagesgivingrisetoaseriesofvaluationsandabandonmentoptionsToalterthemixofinputsoroutputsofaproductionprocessinresponsetomarketpricesStageinvestmentToexpandthescopeofactivitiestocapitalizeonnewperceivedopportunitiesExamplesDescriptionOptionAddingorsubtractingtothedailyflightsonanairlinerouteoraddingmemorytoacomputerWhentoharvestastandoftrees,introduceanewproduct,orreplaceanexistingpieceofequipmentDiscontinuingaresearchproject,closingastore,orresigningfromcurrentemploymentStagingofresearchanddevelopmentprojectsorfinancialcommitmentstoanewventureTheoutputmixofrefinedcrudeoilproductsorsubstitutingcoalfornaturalgastoproduceelectricityExamplesofRealOptions©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong42Chapter5

NewVentureFinancing

创业企业融资

©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong43

Asset-basedLendingBusinessAngelsCapitalLeasingCommercialBankLending(variousforms)CorporateEntrepreneurshipCustomerFinancingDirectPublicOfferingEconomicDevelopmentProgram FinancingEmployee-providedFinancingEquityPrivatePlacementExport/ImportBankFinancingFactoringFranchisingFriendsandFamilyPublicDebtIssue

RegisteredInitialPublicOfferingResearchandDevelopmentLimited PartnershipsRelationalInvestingorStrategic PartneringRoyaltyFinancingSelf(bootstrapping)SmallBusinessAdministration FinancingSmallBusinessInvestment CompanyFinancingTermLoanVendorFinancingVentureCapitalAPartialListofFinancingSourcesforNewVenturesandPrivateBusiness©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong44TimeDollarsRevenueNetIncomeCashFlow00DevelopmentStart-upEarlyGrowthRapidGrowthExitFigure5-1StagesofNewVentureDevelopment

Chapter5©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong45BootstrappingSeedFinancingR&DFinancingStart-upFinancingFirst-stageFinancingSecond-stageFinancingThird-stageFinancingMezzanineFinancingBridgeFinancingLBO,MBO,IPOSequenceofNewVentureFinancing

Chapter5©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong46Self,Friends,andFamilyBusinessAngelsVentureCapitalInvestorsSmallBusinessInvestmentCompanies(SBICs)TradeCreditandFactoringAsset-basedLendingMezzanineCapitalPrivatePlacementsofEquity(RelationalInvestors)IPOsPublicDebtSourcesofNewVentureFinancing

Chapter5©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong47SourcesofNewVentureFinancing

Chapter5

DevelopmentStart-upEarlyGrowthRapidGrowthExitEntrepreneur

FriendsandFamily

AngelInvestors

StrategicPartner

VentureCapital

Asset-basedLender

EquipmentLessor

SBIC

TradeCredit

Factor

MezzanineLender

PublicDebt

IPO

Acquisition,LBO,MBO

Blueshadingindicatesprimaryfocusofinvestortype.Grayshadingindicatessecondaryfocus,orfocusofasubsetofinvestors.©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong48FactorsThatAffectthe

ChoiceofFinancingFinancialneedsoftheventureStageofDevelopmentFinancialConditionProduct-marketConsiderationsOrganizationalConsiderationsTrackRecord/Reputation/RelationshipsChapter5©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong49ImmediacyoftheneedSizeoftheimmediateneedDurationoftheimmediateneedCumulativeneedChapter5FinancialNeedsoftheVenture©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong50CompletenessofthemanagementteamEaseofcommunicatingtheventure’smeritValueofmanagerial/consultingservicesImportanceofflexibility/adaptabilityChapter5StageofDevelopment©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong51Risk/ReturncharacteristicsoftheventureTaxableincomestatusOperatingcashflowstatusTimetoaliquidityeventTransferabilityoftaxbenefitstoinvestorsAvailablecollateralCashflowcycleChapter5FinancialCondition©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong52ImportanceofrapidgrowthImportanceofrelationshipwithasupplierordistributorDedicationofdistributorstotheproductValueofcentralizationofcontrolChapter5Product-marketandOrganizationalConsiderations©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong53TrackrecordoftheventureImportanceoffuturefinancingneedsPastfailureorfinancialdistressLikelyfailureinthenearfutureReputationoftheentrepreneurRelationshipswithfinancingsourcesChapter5TrackRecord/

Reputation/Relationships©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong54SomeFinancingChoicesSecuritizationStrategicinvestingFranchisingVenturecapitalAngelinvestingCorporateventureinvestingSBAprogramsDirectpublicofferingFactoringR&DLimitedPartnershipsVendorfinancingPublicofferingChapter15©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong55Chapter5©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong56Chapter5SourceAmountPercent

Principalowner524.331.33%

Angelfinance603.59%

Venturecapital311.85%

Otherequity215.212.86%Totalequity830.649.64%

Commercialbanks313.818.75%

Financecompanies82.14.91%

Otherinstitutions50.12.99%

Tradecredit264.115.78%

Otherbusinessfinancing82.14.91%

Government8.10.48%

Fromprincipalowner68.54.09%

Creditcards2.40.14%

Otherindividuals24.51.46%Totaldebt842.950.37%Total1673.4100.00%Note:Includesallnon-farm,non-financial,non-realestatesmallbusinessesSource:BergerandUdell(1998).EstimatesofFinancingtoSmallBusinessesandNew

Venturesasof1992.©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong57LearningObjectives

Learnnewventurefinancingterminology.Understandthevalueoftyingfinancingtoperformancemilestones.Recognizethedistinguishingcharacteristicsofthevariousstagesofnewventuredevelopment.Identifythefinancingsourcesavailabletoanewventureandthefactorsfavoringonefinancingsourceoveranother.Learnthebasicstructuresandavailabilityofvariousfinancingsources.Identifythekeyelementsofdealstructureandthefunctionstheyserve.

Chapter5©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong58CompletionofConceptandProductTestingCompletionofPrototypeFirstFinancingCompletionofInitialPlantTestsMarketTestingProductionStart-upFirstCompetitiveActionFirstRedesignorRedirectionFirstSignificantPriceChangeSomeMilestonesfor

NewVenturePlanning

Chapter5BlockandMacMillan(1992)©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong59Chapter5

FinancialForecasting©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong60LearningObjectivesLearntheelementsofthecashflowcycle.Understandthefourcriticaldeterminantsofafirmsfinancialneeds:minimumefficientscale,profitability,cashflow,andsalesgrowth.Learnhowtoprepareasalesforecastforanestablishedfirm.Learnhowtoprepareasalesforecastforanewventure.Developafinancialmodelofaventureusingproformaanalysistointegrateincomestatement,balancesheet,andcashflowitems.Identifypubliclyavailabledatasourcestoprovideanobjectivebasisforunderlyingassumptionsofthefinancialmodel.Chapter5©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong61AdisciplinedmeanstoevaluatethecashneedsofaventureAnaidtodeterminewhetheraproposedventuredeservestheentrepreneur’sinvestmentofcapitalandeffortAmeanstocomparetheexpectedvaluesofstrategicalternativesAwaytodemonstrateprojectmeritstoinvestorsandtouseinnegotiatingownershipAwaytoidentifyappropriatebenchmarksforassessingprojectdevelopmentBenefitsofFinancialForecastingChapter5©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong62CashFutureCashChapter5TheFirmasaCashAmplifierFirm©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong63Chapter5TheCashFlowofaBusinessVentureFixedAssetsCapital(equityanddebt)InfusionsCashExpendituresEmployeesMaterialsProductionInventory/ServiceEndingCashEquityReturnsDebtServiceTaxesCashsalesAccountsReceivableCreditSalesCollectionsReinvestment(toretainedearnings)©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong64KeyDeterminantsofFinancialNeeds1)

Minimumefficientscaleandcapitalintensity2)Profitability3)Cashflow4)SalesgrowthChapter6©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDongFigure5-2QuantityDollarsQQ*Manufacturer’sLongRunAverageCost(LRAC)Chapter5©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong66Competitioninmarketswheretheminimumefficientscale(MES)ofanenterpriseislargeLowprofitmarginsHighratesofsalesgrowthIncreasedrelianceondepreciationofassetsandlessonexpensingofassetsExpectationoflowcashflowlevelsIncreasedtradecreditoffered(accountsreceivableasafractionofassetsishigh)Decreasedtradecreditused(accountspayableasafractionofassetsislow)FactorsthatIncrease

aFirm’sCashNeedsChapter5©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong67Chapter6

VentureCapital风险投资©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong68

Chapter6VentureCapitalSource©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong69Chapter6VentureCapitalNewCommitments©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong70Chapter6SourcesofVentureCapitalFunds©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong71Source:

Smith,RichardL.;Smith,JanetKiholmEntrepreneurialFinance,JohnWiley,2000.Chapter6OrganizationalStructureofVentureCapitalInvestmentPortfolioCompaniesValuecreation

GeneratedealflowScreenopportunitiesHarvestinvestments

NegotiatedealsMonitorandadviseGeneralPartnersVentureCapitalFund

PensionplanEndowmentsLifeinsurancecompanies

CorporationsIndividualsLimitedPartnersEffortand1%ofcapitalAnnualManagementFee2-3%CarriedInterest20-30%ofGain99%ofInvestmentCapitalCapitalAppreciation70-80%ofGainInvestmentCapitalandEffortFinancialClaims©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong72Chapter6AllocationofVentureCapitalistTime©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong73TheVentureCapitalInvestmentProcessDevelopmentofFundConceptSecureCommitmentsfromInvestorsGenerateDealFlowClosingofFundFirstCapitalCallScreenBusinessPlansEvaluateandConductDueDiligenceNegotiateDealsandStagingAdditionalCapitalCallsInvestFundsDistributingProceedsCashPublicShares

OtherHarvestingInvestmentIPOAcquisition

LBOLiquidationValueCreationandMonitoring

BoardservicePerformanceevaluationandreviewRecruitmentmanagement

AssistwithexternalrelationshipsHelparrangeadditionalfinancingYear01-3years1-5years1-3yearsormore3-10yearsplusextensions©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong74Chapter7NewVentureGrowthManagement创业企业成长管理

©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDongFigure7-1Rapidgrowthrequiresalargerorganization.Economies-of-scopeimplymoreproductlines.FinancialStrategyProductMarketStrategyOrganizationalStrategyThemoreverticalandhorizontalintegration,thegreaterthefinancialneeds.Outsideinvestmentismorelikelythelargerthefirm.Rapidgrowthreducesfinancialflexibilityandrequiressacrificingcontroltoattractoutsidefinancing.

Outsidev.entrepreneurDebtv.equityLoancovenantsOptionsStagingTypeoffinancingFinancialcontracts

PriceMarginQualityDifferentiationProductTargetedsalesgrowth

ScaleandscopeVerticalboundariesHorizontalboundariesChapter7InteractiveFinancialStrategy©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDongFigure4-2Chapter7FinancialImplicationsofProduct-MarketandOrganizationalStrategicChoicesChapter8

Harvesting©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong78HarvestingAlternativesInitialpublicofferingPrivateplacement/privatesaleRoll-upIPOManagementbuy-outEmployeestockownershipplanChapter8©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong79TheUnderwrittenIPOProcessTheroleoftheunderwriterIssuepricingDuediligenceCertificationDistributionMarketmakingHarvestingbygoingpublicIntheIPOAftertheIPOCostofpublicofferingCostofharvestingbygoingpublicChapter8©GuanghuaSchoolofManagement,2009,EntrepreneurialFinance,WangDong80TheIPOIssuePricingProcess

foraFirmCommitmentUnderwritingFigure8-1ComparableFirmValuesComparableTransactionsandIPOsDiscountedCashFlowValuationInformationfromIssuerPreliminaryEstim