Book value matters

Information Arbitrage

These dynamics beg the following question: Does creating intrinsic value matter in technology start-ups, or are operating cash flows all that really count to a (hopefully) fast-growing early stage business? By “intrinsic value” I’m referring to the worth of a business if it were to cease operating, with buyers offered the chance to purchase all or part of its assets. Going for the big win and creating asset value along the way are by no means mutually exclusive.

Mathematical vs. Economic Dilution of Startup Equity: Thinner Slices of an Extra-Large Pizza

Gust

Every S-1 contains the same language in Risk Factors that reads, essentially, “If you buy shares in our IPO, you will experience substantial and immediate dilution in the pro forma net tangible book value per share.”

Trending Sources

You have to judge a cover by its book

Life Beyond Code

Let’s take a book, your book. Your book is the value you bring to the marketplace. The cover of your book is your personal brand. In other words, your cover is the assessment that the marketplace makes about the value you bring too the marketplace.

The Business Model Canvas Gets Even Better – Value Proposition Design

Steve Blank

Product/Market fit now has its own book. This week the author of the business model canvas, my friend Alexander Osterwalder, launched his new book Value Proposition Design , the sequel to his million copy best seller, Business Model Generation. His new book does three things: 1.

Include your labor value in your plan.

Berkonomics

Worse yet, the IRS would then consider the accrued amount to be taxable income upon which no tax was paid, since the accrued labor as an investment has value that was not accounted for from previously taxed earnings.

Restrictions On Transfer in the Facebook Age

Recent Buzzes - VC Experts, Inc.

book value or an earnings multiple), at a price that matches the price offered by a third party, or at "fair value." By Joseph W. Bartlett, Of Counsel, Sullivan & Worcester LLP.

3 Lessons From Warren Buffett's Annual Letters

Inc Startups

At the end of the day, the impact of your annual stakeholder letter does not hinge on a P/E ratio or book value. Warren Buffett''s 2012 letter to stockholders offers important executive-communication lessons for leaders of public and private firms alike.

6 Company Values That Will Boost Cash Flow

Inc Startups

Every company has values. Here are six surefire values that will do your company some good. If so, your start-up may have wrong values. And those badly chosen values encourage the wrong people do the wrong things. What do your customers value-- quality, service, low price?

3 Pillars of Valuation

Inc Startups

They’re an “output” number that measures what companies are being valued at, rather than an “input” that would be helpful in determining the value of your own particular company.

Tonight We're Going To Party Like It's 1999

Launching Tech Ventures

The table below compares the market value at the end of 2001 —the trough of the valuation cycle that began in the mid-1990s—to total capital raised since inception (private and public) for all 2,121 U.S-based Enterprise values were estimated as of December 31, 2001.

Lean 18

Tonight We're Going to Party Like It's 1999

Platforms and Networks

The table below compares the market value at the end of 2001 —the trough of the valuation cycle that began in the mid-1990s—to total capital raised since inception (private and public) for all 2,121 U.S-based Enterprise values were estimated as of December 31, 2001.

SaaS Nomenclature

Seth Levine's VC Adventure

For example when you say sales do you mean booking or revenue? If bookings are the total contract value of everything you sold in a period, how do you normalize for different contract lengths? Are renewals counted in bookings or broken out separately? New MRR – Also a bookings number but this normalizes for the monthly/annual/2 year booking but simply taking the one month value of all the customers sold in the period we’re talking about.

Share of Revenue and Profits

Will Price

more book value than at its peak valuation. The questions of where is the floor and what is the intrinsic value are begged by the separation.

Howard Tullman: Always On

Inc Startups

They had an embryonic idea to make money on the spread between how much auto insurers were willing to pay for replacement cars—based on often-inflated book value—and how much car dealers charged.

Never run out of money.

Berkonomics

Running out of cash denigrates the very value of a business, reducing greatly any bargaining power with suppliers or acquirers. A company that otherwise might be valued at twice book value, 1x revenues, or 10 times earnings will be valued at a lower amount by potential acquirers knowing that the company shareholders are in a tough position and management hungry for leverage and a little more sleep at night. Money in the bank is like oil in the car.

Repurchase agreements: what you should know before you sign

High Contrast

Also, issuing shares at less than fair market value could be a breach of the fiduciary duty of directors and could expose them to a lawsuit from the disgruntled party. Sim has pointed out to me that he sometimes sees 409(A) valuations used to determine fair market value in shareholder agreements that apply to many shareholders. Typical formulas are things like multiples of revenue or EBITDA or even, sometimes, book value.

VC Governance FAQ: (2) Especially now, when transparency is so important, why is limited financial information available from a private company?

Pascal's View

Putting that point aside, for a moment, what is absent is a quoted liquid market in their equity and debt securities, which means that the determination of the book value of those private companies is necessarily subjective.

Carried Interest Debate Cont.: The Death of Sweat Equity?

Burnham's Beat

While it may be hard for people to recognize the value of intangible contributions in the case of a VC or PE professional who is pulling down millions in management fees, its pretty easy to see this in the case of a small businessman who is investing their time and expertise (and receiving $0 in management fees) to make a restaurant a success or to renovate an apartment building. Books All Tech Investors Should Read. Valuation: Measuring and Managing the Values of Companies.

Web 3.0 isn't the Semantic Web, it's Hailstorm 2.0. Why it Matters.

500 Hats

on those merits alone, and counting the book value of Yahoos minority stakes in Yahoo! It means my address book / list of friends is always available, and more importantly that my current context is understood and considered when i want to share my experience with others.

Do you buy stocks?

Kevin Dewalt

I quickly became interested in the subject and read everything I could find on it from books by Peter Lynch and Ben Graham to periodicals like the Wall Street Journal and Investor Business Daily. If you want some great information on what we should probably be doing, I suggest Bernstein’s books – particularly the Intelligent Asset Allocator – or David Jackson’s ETF Investing Guide.

DC 0