Transcript class11lecture

Slide 1
Investment Recommendations
Purpose
Content
Structure
70-397 Venture Finance
Fall 2002
Andrew W. Hannah and William C. Hulley ©
Slide 2
Agenda
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Diligence B discussion
Investment Recommendations
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70-397 Venture Finance
Goals
Content
Structure
Backup
Presentation
Fall 2002
Andrew W. Hannah and William C. Hulley ©
Slide 3
Goals of the Recommendation
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To overview – Present a clear picture of the
company, product and opportunity
To persuade – why do or not do the deal?
To inform –
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What info is needed to decide?
Present the diligence results in a manner that
supports the recommendation
To provide for further inquiry – what is missing?
To plan the future – what happens next?
70-397 Venture Finance
Fall 2002
Andrew W. Hannah and William C. Hulley ©
Slide 4
Content
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Company, product, market, customer, competition,
competitive advantage, management, finances
Investment
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How much, terms, who else
Facts (diligence): Verified, discovered, calculated
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70-397 Venture Finance
Market
Competition
Comparables
Valuation
Issues raised by diligence, not addressed in plan
What did you pay attention to?
Fall 2002
Andrew W. Hannah and William C. Hulley ©
Slide 5
Content (Cont.)
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Unknowns, Risks, Uncertainties
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What don’t we know
What don’t we know that we don’t know
Recommendation – yes, no, with conditions
Basis for the recommendation
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70-397 Venture Finance
Markets – size, growth rate, key features
Competition – direct and indirect, key features, strength
and weaknesses
Comparables – business model, financials, valuation
Valuation – how much? Exit and when?
Fall 2002
Andrew W. Hannah and William C. Hulley ©
Slide 6
Structure
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2.
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Overview
Issues Explored
Facts
Repeat “2.” and “3.”
Issues, Risks, Uncertainties
Recommendation
70-397 Venture Finance
Fall 2002
Andrew W. Hannah and William C. Hulley ©
Slide 7
Backup
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Diligence Memos
Supporting Documentation
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Reports
Articles
Collected data
Make sure it is relevant
70-397 Venture Finance
Fall 2002
Andrew W. Hannah and William C. Hulley ©
Slide 8
Presentation Goals
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Repeat the same in ten slides or less
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Highlight the “killer” points
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Overview, issues, facts, unknowns, recommendation
Does it matter
Make it black & white
Have backup ready
Make the recommendation clear
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It’s a binary call…
Or is it?
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70-397 Venture Finance
When is the right answer, no answer?
When is collecting more data the right answer?
Make it short
Make sure it includes what happens next
Fall 2002
Andrew W. Hannah and William C. Hulley ©
Slide 9
Key Points
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Are you clear, concise, accurate?
Does your diligence support your recommendation?
Does your reasoning support your recommendation?
Does the backup material matter?
Is your recommendation clear?
70-397 Venture Finance
Fall 2002
Andrew W. Hannah and William C. Hulley ©
Slide 10
Grading
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Did you
Did you
and 5)?
Did you
Did you
70-397 Venture Finance
meet the Recommendation Goals (Slide 3)?
present the appropriate Content (Slides 4
meet the Presentation Goals (Slide 8)?
meet the Key Points (Slide 9)?
Fall 2002
Andrew W. Hannah and William C. Hulley ©
Slide 11
Schedule – remainder of classes
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See word doc…
70-397 Venture Finance
Fall 2002
Andrew W. Hannah and William C. Hulley ©
Slide 12
Next Week
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Homework
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Draft recommendation
Draft presentation
Question card D (CEO)
Draft presentations
70-397 Venture Finance
Fall 2002
Andrew W. Hannah and William C. Hulley ©