Entrepreneurship - Heidi Neck, Blank 208 (Neck), HNeck@Babson.edu;
Session 2, Sep 7, 2011
Assignment: Discussion on the book: Action trumps Everything
start: boat exercise
an economist: Daniel
Session 3: Sep 12, 2011
Why would you want to be an entrepreneur?
What's good about it?
predictable or spontaneous: 4
Logical or visionary: 4
Total: 27
book recommendation: whole new mind
mind dumping exercise
Session 5: Sep 16, 2011
Session 7: Sep 21, 2011
Session 9: Sep 28, 2011
Case: Feed Resources
(in the book page 455)
anaerobic digestion
Session X: Oct 5, 2011
evaluation of the company
Question: What % equity to give away?
You need to know:
1) Future value of your company
2) Future value of your investment
Valuation example
NI in year 5 = $2.5M
(assume seed company PE ration = 15%)
PE (price to earnings) = 15 (It is based on the industry averages)
Investor = $2M
Hold period = 5 years
ROR = 50%
Calculation
FV of company = NIAT * PE
= $2.5M * 15
= $37.5M
FV of investment = PV (1 + IRR)^n
= $2M(1 + 0.5)^5
= $15.2M
So now what % of equity to give away
= FV of teh investment / FV of teh company
= $15.2M / $37.5M
= 41%
Post money valuation = $2M/41% = $4.9M
Pre money valuation = $4.9 - $2M = $2.9M
Session 2, Sep 7, 2011
Assignment: Discussion on the book: Action trumps Everything
start: boat exercise
an economist: Daniel
Session 3: Sep 12, 2011
Why would you want to be an entrepreneur?
What's good about it?
- Self employed
- seeding own ideas
- fee creative
- rewarding to follow passion
- alignment
- develop stuff
- take risks
- more fulfillment
- ok to screw up
- creating jobs
- solve outstanding needs
- change something
- freedom; do what you want, go where you want, shape your future
What's stopping you?
- too risky
- fear of failure
- confidence
What is the best idea you've had but never started?
Vera Bradley
Session 4: Sep 14, 2011
TED video
Steven Johnson - where good ideas come from
Brain Orientation:
1 -6 from left to right
Ideal realist or Ideal builder: 3
Session 4: Sep 14, 2011
TED video
Steven Johnson - where good ideas come from
Brain Orientation:
1 -6 from left to right
Ideal realist or Ideal builder: 3
Rational or emotional: 5
Process oriented or ppl oriented: 5
Neat & organized or messy and chaotic: 2
Trust the facts or trust the gut instinct: 4Process oriented or ppl oriented: 5
Neat & organized or messy and chaotic: 2
predictable or spontaneous: 4
Logical or visionary: 4
Total: 27
book recommendation: whole new mind
mind dumping exercise
Session 5: Sep 16, 2011
Session 7: Sep 21, 2011
Session 9: Sep 28, 2011
Case: Feed Resources
(in the book page 455)
anaerobic digestion
Session X: Oct 5, 2011
evaluation of the company
Question: What % equity to give away?
You need to know:
1) Future value of your company
2) Future value of your investment
Valuation example
NI in year 5 = $2.5M
(assume seed company PE ration = 15%)
PE (price to earnings) = 15 (It is based on the industry averages)
Investor = $2M
Hold period = 5 years
ROR = 50%
Calculation
FV of company = NIAT * PE
= $2.5M * 15
= $37.5M
FV of investment = PV (1 + IRR)^n
= $2M(1 + 0.5)^5
= $15.2M
So now what % of equity to give away
= FV of teh investment / FV of teh company
= $15.2M / $37.5M
= 41%
Post money valuation = $2M/41% = $4.9M
Pre money valuation = $4.9 - $2M = $2.9M
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