Outline five benefits of a business plan.
Name and briefly explain three elements which successful company start-ups have in common.
Which four key questions need to be answered by a business idea?
Questions a Business Idea Needs to Answer
1. Problem Solving – Which problem will your business idea seek to overcome? What precisely is so innovative about your business idea? In what way is your business idea unique? Is it perhaps even patented?
2. Market – Who will buy this product? Why should the customer buy the product? What need does it satisfy? How does the product get to the customer?
3. Competition – What is the new company's competitive edge, and what is there to stop an employee simply copying the benefits? Why is the product better than equivalent products?
4. Profit mechanisms – Is the product suitable to make money? What costs are involved, and which prices are feasible?
Differentiate eight elements/chapters in a typical structure of a Business Plan .
For each of the following business plan chapters, name and briefly explain four points to be addressed in that chapter:
a. Product/service
b. Founding team
c. Marketing
d. Business system and organization
Outline the consequences of an over-optimistic and an over-pessimistic business plan.
Name and briefly explain six objectives of budgeting.
Draw a cash flow chart showing cumulative cash flow over 5 years for three different risk scenarios and sensitivities of a startup company. Briefly describe each of the three scenarios.
Name and briefly explain seven different sales channels.
Describe the structure and the content of operational planning.
Characterize the Top-Down/Bottom-Up Planning approach and name three advantages of this approach.
What are the three essentials parts of the annual financial statement plan of an integrated business plan? Briefly describe each of the three parts.
Characterize Rolling Forecasting and describe six best-practices in developing a Quarterly Rolling Forecast.
Explain how the purchase of a machine is recorded for in different plans.
Name three marketing, three financial, and three management best practices of high-growth, high- performance firms.
Name and briefly explain six possible influences on the revenue plan.
Identify four quick check areas of a business idea. Describe each of these four quick checks an their relevance for the business plan assessment.
What is a Business Model und what is the Business Model Canvas?
provide an structured overview of the Capital Markets including major segments and their sub-segments .
Name and briefly explain the nine building blocks of the Business Model Canvas.
Differentiate five different phases of a company life cycle from its beginning of existence until full majority. Describe the typical features of each phase, draw a chart of the expected earnings/losses along the phases and name the typical source of financing and the typical management problems for each phase.
Characterize Business Angels along five dimensions
Draw a chart of the structure a typical Private Equity or Venture Capital Fund with all key participants at the three levels: principal level, financial intermediary level and target company level. Provide proper names for each party in this structure and draw lines between the parties with short description of the relationships between the parties.
Distinguish two different types of compensation paid to the fund manager, briefly describe both types of compensation and give a range in % figures for both types of compensation.
Name the three main VC players and explain their responsibilities.
Explain the Fund-of-Funds structure. What is the typical financial compensation of a fund of fund (type and % value)? Name four advantages of FoF.
Characterize four VC investor types along three dimensions.
Name six sources of investment opportunity and name an advantage and a disadvantage of each.
Name seven typical reasons why start-ups fail.
Name and briefly explain the five steps along the way to an investment.
What are the three objectives of a term sheet?
Differentiate the goals of an entrepreneur and of a venture capitalist along four dimensions.
Name and briefly explain eight key elements of a typical term sheet.
Explain the terms “Liquidation Preference”, “Pay-to-Play”, “Anti-Dilution”, “Vesting”, Lock-up”, “Right of First Refusal”, “Take-me along”, and “Drag-along”.
Name four exit methods and name two advantages and two disadvantages of each.
Explain the terms “Periodic return”, “Compound return”, and “Annualized return”.
What are the disadvantages of annualized returns?
What are the drawbacks of the IRR regarding VC investments?
Name and briefly explain five challenges of when evaluating growth companies
Challenges when Valuating Growth Companies
• Short representative history of a company at the beginning of the lifecycle, no track record
• Limited financial resources to finance investments, e.g. in R&D, product development, or marketing need to inject external cash
• High importance of intangibles (e.g. know-how of management and employees), esp. for technology-oriented companies
• High requirements regarding flexibility to cope with high dynamics
• High level of risk, at the same time high potential returns
Provide an overview of the most common Venture Valuation Methods. Differentiate at least 5 different methods .
Name and briefly explain the three rule-of-thumb methods
Name and briefly characterize the three stages of growth of a growth company.
Distinguish two influencing factors of the target return of a Venture Capital investment. Briefly describe, why each of the factors is stronger during the startup phase then during later stages of the company.
Structure the sources of potential multiples for the comparables analysis.
Assess the suitability of the DCF-method for venture valuation along four dimensions.
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