ENFB 4190 Auburn Corman exam 2
questions and answers
we will be negotiating term sheet for round of funding by - Correct Answers -talking
about each one of the rounds and what they are like
seed round, first one
selling atleast %10 of your company, maybe more depending on valuation
if your idea is good enough that a knowledgable investor is invest dollars then you have
a really good idea, (min valuation $0.5 million) - Correct Answers -R & D or finance
stage,
-2-3 page feasibility study
-starting with a feasibility study, not getting salaries
Mangt team is just you,
AMT of funding is $15-500k for
-building prototype
-website
-patents (at least provisional for one year)
-initial marketing research
SOURCE of funding:
-friends and family
-founders, fools
-accelerators
Sources of funding for seed level funding - Correct Answers --friends and family
-founders, fools (accredited investors)
-accelerators
accredited sophisticated investor are:
Fools are angels - Correct Answers -SEC accredited investors, 200,000 a year filing
individually, or 300'000 a year, or have a net worth of 1 million - equity primary
residence
, you are in aheap of trouble if you raise money from unaccredited investors that aren't
friends and family
series A round, second one - Correct Answers -Launch stage
-fully vetted business plan
- salaries
no revenue, pre revenue for first round
each round of funding will last you 12 months
partial management team will come onboard when funding arrives
500k - 4 million dollars of funding
1-2 % of equity to the management team
valuation of 1 million - 10 million
first round of series A funding (pre-money) - Correct Answers -company valuation (pre
money valuation) 1 - 4 million
company valuation (post money valuation) 4 - 10 million
second and third series A round of funding - Correct Answers -post revenue
series B round, third one - Correct Answers -Expansion stage
CD, treasury bills diskless investment - Correct Answers -1.2% return
high quality (AAA) bonds, slightly higher risk - Correct Answers -3-4% return
junk bonds, lower quality, (BA) or below - Correct Answers -5-8% rate of return
invest in publicly traded equity, less risky because liquidity, if you buy google you can
sell google whenever you'd like, - Correct Answers -11% 40 year average
investment / post-money valuation = - Correct Answers -ownership percentage received
by investor
owner invested $500,000
they got %25
so post money valuation was 2 million
questions and answers
we will be negotiating term sheet for round of funding by - Correct Answers -talking
about each one of the rounds and what they are like
seed round, first one
selling atleast %10 of your company, maybe more depending on valuation
if your idea is good enough that a knowledgable investor is invest dollars then you have
a really good idea, (min valuation $0.5 million) - Correct Answers -R & D or finance
stage,
-2-3 page feasibility study
-starting with a feasibility study, not getting salaries
Mangt team is just you,
AMT of funding is $15-500k for
-building prototype
-website
-patents (at least provisional for one year)
-initial marketing research
SOURCE of funding:
-friends and family
-founders, fools
-accelerators
Sources of funding for seed level funding - Correct Answers --friends and family
-founders, fools (accredited investors)
-accelerators
accredited sophisticated investor are:
Fools are angels - Correct Answers -SEC accredited investors, 200,000 a year filing
individually, or 300'000 a year, or have a net worth of 1 million - equity primary
residence
, you are in aheap of trouble if you raise money from unaccredited investors that aren't
friends and family
series A round, second one - Correct Answers -Launch stage
-fully vetted business plan
- salaries
no revenue, pre revenue for first round
each round of funding will last you 12 months
partial management team will come onboard when funding arrives
500k - 4 million dollars of funding
1-2 % of equity to the management team
valuation of 1 million - 10 million
first round of series A funding (pre-money) - Correct Answers -company valuation (pre
money valuation) 1 - 4 million
company valuation (post money valuation) 4 - 10 million
second and third series A round of funding - Correct Answers -post revenue
series B round, third one - Correct Answers -Expansion stage
CD, treasury bills diskless investment - Correct Answers -1.2% return
high quality (AAA) bonds, slightly higher risk - Correct Answers -3-4% return
junk bonds, lower quality, (BA) or below - Correct Answers -5-8% rate of return
invest in publicly traded equity, less risky because liquidity, if you buy google you can
sell google whenever you'd like, - Correct Answers -11% 40 year average
investment / post-money valuation = - Correct Answers -ownership percentage received
by investor
owner invested $500,000
they got %25
so post money valuation was 2 million
