The Business Professor
Is a Business Idea Feasible - Financial Analysis
How do you determine whether a business idea is financially feasible? You need to evaluate the economic viability of your business idea by considering your start-up cost, cash flow and operational expenses.
The Business Professor
Invoicing - Components of an Invoice
What are the components of an invoice? An invoice is a document that you send to customers to request or collect payment for a good or service that has already been provided. There are nine basic components in an invoice: company...
The Business Professor
Investor Presentation - Financial Forecasts
How do you present financial forecasts in an investor presentation? The financial slide includes a balance sheet, the income, cash flow statements, and projections.
The Business Professor
Investor Presentation - Business Model
What is a business model in an Investor Presentation? It includes everything from how your company functions to what your business strategy is to generate revenue. While presenting the pitch deck to investors, the business model slide...
The Business Professor
Investor Pitch - Format & Content
What is the Format and Content of an Investor Presentation? It covers key points of your business such as your vision, market opportunity, products and services, high-level financials and funding needs. A winning pitch deck needs to be...
The Business Professor
Funding from Equity Investments
What is business funding from equity investors? Equity financing is a popular way for entrepreneurs to raise money for their businesses without acquiring debt. In this form of additional capital, the company owner sells shares to equity...
The Business Professor
Excess Earnings Method - Business Valuation
What is the Excess Earnings Method of Business Valuation? The excess earnings method (also called the “formula” method) basically values a company in two pieces – the tangible value and the intangible (or “goodwill”) value. The tangible...
The Business Professor
Discount Future Cash Flows - Business Valuation
What is the Discount Future Cash Flows Method of Business Valuation? Discounted cash flow (DCF) is a method of valuation used to determine the value of an investment based on its return in the future–called future cash flows. DCF helps...
The Business Professor
Debt vs Equity - A Balance
Should a business raise money through selling equity or incurring debt? Debt financing may have more long-term financial benefits than equity financing. With equity financing, investors will be entitled to profits, and if you sell the...
The Business Professor
Contributing Intellectual Property for Equity
When do investors or founders contribute intellectual property to a startup in exchange for an ownership or equity interest? When the company is formed, the founders are typically issued common stock in the company in exchange for the...
The Business Professor
Capitalizing or Funding a New Business
What are the options for funding a New Business? How does funding affect the capital structure? Retained earnings, debt capital, and equity capital are three ways companies can raise capital. Using retained earnings means companies don't...
The Business Professor
Business Model vs Business Plan
What is the difference between a Business Model and a Business Plan? The business model is the foundation of a company, while the business plan is the structure. So, a business model is the main idea of the business together with the...
The Business Professor
Approaches to Management Decision Making
What are the Approaches to Management Decision Making? Rational decision-making model, Bounded rationality decision-making model, Intuitive decision-making model, and. Creative decision-making model.
The Business Professor
Anti-Dilution Protection
What is Anti-Dilution Protection? Anti-dilution protection is a contractual right that prevents your ownership percentage in a company from decreasing when new shares are issued.
The Business Professor
Angel and Venture Capital Investments
What are Angel and Venture Capital Investments? Venture Capitalist vs. Angel Investor: What's the difference? Venture capitalists are business professionals who invest money into startups on behalf of a risk capital company (they use...
The Business Professor
When to Incorporate a Business Entity
When should you Incorporate a Business Entity? Incorporate before hiring employees helps to protect your assets. Businesses that have or expect to have employees should incorporate before hiring them. Employers are generally liable for...
The Business Professor
Venture Capital Method - Business Valuation
What is the Venture Capital method of business valuation? “Venture Capital Method” for determining a company's valuatio involves multiplying the company's projected revenue with its projected margin and industry price-to-earnings to...
The Business Professor
Venture Capital
What is Venture Capital? Venture capital is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or...
The Business Professor
Term Sheet Provisions
What are Term Sheets? What are the primary term sheet provisions? A term sheet often covers four main categories: the deal economics, the investor rights, the governance and oversight, and the exit terms. A term sheet must communicate...
The Business Professor
Small Business Investment Company (SBIC)
What is a Small Business Investment Company (SBIC)? An SBIC is a privately owned company that's licensed and regulated by the SBA. SBICs invest in small businesses in the form of debt and equity. The SBA doesn't invest directly into...
The Business Professor
Private Equity - Exiting the Business
What does it mean for a Private Equity Firm to Exit a Business? PE firms buy an interest in a business. As an exit strategy, private equity firms use IPOs to partially or completely divest their ownership and provide liquidity to their...
The Business Professor
Preferred Stock - Liquidation Preference
What is a liquidation preferenc in preferred stock? A liquidation preference is a clause in a contract that dictates the payout order in case of a corporate liquidation. Typically, the company's investors or preferred stockholders get...
The Business Professor
Pre-Money and Post-Money - Business Valuation
What is pre-money valuation? What is post-money valuation? Pre-money valuation refers to the value of a company not including external funding or the latest round of funding. Post-money valuation includes outside financing or the latest...
The Business Professor
Participating Preferred Stock
What is Participating Preferred Stock? Participating preferred stock is preferred stock that provides a specific dividend that is paid before any dividends are paid to common stock holders, and that takes precedence over common stock in...