Introducing Finance Bootcamp: Critical finance skills for ALL entrepreneurs
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This document introduces the Finance Bootcamp, a 2-day workshop that provides entrepreneurs and business professionals a fast overview of essential financial skills. The Bootcamp covers topics like corporate finance, managerial accounting, business valuation, and engaging with investors. Attendees will learn key financial concepts and develop basic competency in applying analysis to make better business decisions.
Introducing Finance Bootcamp: Critical finance skills for ALL entrepreneurs
- 1. Introducing Finance Bootcamp This document should only be reproduced with the expressed written consent of Ken Globerman.
- 2. 2 @KenGloberman – Finance Bootcamp All Rights Reserved OBSERVATION Entrepreneurs with great technical skillsets and business professionals with vertical competencies are often missing key ingredients to achieving broader success
- 3. 3 @KenGloberman – Finance Bootcamp All Rights Reserved OBSERVATION They find themselves managing a growing business environment “financially blind” Or they find themselves negotiating with investors with little knowledge of the subject
- 4. 4 @KenGloberman – Finance Bootcamp All Rights Reserved Introducing Finance Bootcamp “Finance Bootcamp” is a 2-day workshop providing a fast, practical overview of the essential financial and managerial accounting skills you need to know to sell, manage and raise capital for your business most effectively. If you are better at delivering great products and services than reading financial statements or creating financial models, this workshop is for you. It’s taught in an American style, involves teamwork, group exercises, interactivity and conducted fully in English. Finance Bootcamp is perfect for entrepreneurs, managers and business leaders with limited knowledge of money and banking, finance or managerial accounting.
- 5. 5 @KenGloberman – Finance Bootcamp All Rights Reserved Finance Bootcamp Learning Objectives To learn the building blocks of corporate finance and managerial accounting all businesspeople should know To develop a basic competence in how to apply financial analysis to decision making scenarios To introduce how business valuation works To understand the investment process and “zero in” on early stage businesses
- 6. IS FINANCE BOOTCAMP FOR YOU? LET’S FIND OUT…
- 7. @KenGloberman – Finance Bootcamp All Rights Reserved Practical Corporate Finance Introduction
- 8. 8 @KenGloberman – Finance Bootcamp All Rights Reserved Let’s imagine our busiuness has two investment alternatives… Which project generates greater value? Project A Project B 1 2 3 1 2 3
- 9. 9 @KenGloberman – Finance Bootcamp All Rights Reserved OBSERVATION Shareholder Value is not ONLY about generating future cashflow. How long it takes to generate it is just as critical.
- 10. Now let’s imagine we are faced with the following 2 offers. (A) The 1st offer promises us $100,000 today, whilst (B) the 2nd offer promises $110,000 1 year from now. How do we assess these alternaDves?
- 11. 11 @KenGloberman – Finance Bootcamp All Rights Reserved Timeline of Cashflow Offers 1 TIME (YRS) 0 Offer 1 100,000zl TIME (YRS) 0 1 Offer 2 110,000zl Timeline of Cashflows!
- 12. To assess, we may calculate the PRESENT VALUE of receiving $110,000 one year from now and compare it to the alternaDve of simply receiving $100,000 in cash today.
- 13. To do this, we ask ourselves: “How much must I invest today to end up with $110,000 1 year from now?” Let’s imagine with the cash today, we could easily generate 12% interest in the bank
- 14. 14 @KenGloberman – Finance Bootcamp All Rights Reserved Calculating Present Value (PV) TIME (YRS) 0 1 Offer 1 100,000zl TIME (YRS) 0 1 Offer 2 110,000zl zlPV 000,11012.1 =× zl zl PV 214,98 12.1 000,110 == 98,214zl WE CHOOSE OFFER #1 WHICH HAS THE GREATER PRESENT VALUE
- 15. 15 @KenGloberman – Finance Bootcamp All Rights Reserved SO WHAT?
- 16. 16 @KenGloberman – Finance Bootcamp All Rights Reserved ALL investment decisions hinge upon an assesment of: (1) Time, (2) Risk and (3) Expected Future Cashflow
- 17. 17 @KenGloberman – Finance Bootcamp All Rights Reserved Finance Bootcamp thoroughly covers the basic concepts of Corporate Finance such as Net Present Value. It explores alternative return on investment methods such as Internal Rate of Return. This entire section of Finance Bootcamp is the underpinning of business valuation. Finance Bootcamp Takeaway
- 18. @KenGloberman – Finance Bootcamp All Rights Reserved Managing Through Accounting Introduction
- 19. 19 @KenGloberman – Finance Bootcamp All Rights Reserved Myth: “Accounting Is Mainly About Recording Events”
- 20. 20 @KenGloberman – Finance Bootcamp All Rights Reserved All constituents connected to the firm use elements of accounting to communicate with one another Accounting provides measures of the performance of people, products, and projects in a business Regulators Consumers Firm Lenders Financial Markets Tax AuthoriHes Suppliers Chief ExecuHve Officer & Management Board Managers Managers Managers Managers
- 21. 21 @KenGloberman – Finance Bootcamp All Rights Reserved Myth: “I don’t worry about accounting. My finance person handles it.” TAKEAWAY: KNOW HOW TO READ YOUR SCOREBOARD!
- 22. 22 @KenGloberman – Finance Bootcamp All Rights Reserved Balance Sheet Income Statement Cash Flow Statement 3 Accounting “Scoreboards” You NEED TO KNOW
- 23. 23 @KenGloberman – Finance Bootcamp All Rights Reserved Finance Bootcamp leaves you with a basic comprehension of the 3 primary accounting statements and how you can use metrics from them to manage your business most effectively. You will learn how to build your own financial statements. Finance Bootcamp Takeaway
- 24. @KenGloberman – Finance Bootcamp All Rights Reserved Practical Valuation Introduction
- 25. 25 @KenGloberman – Finance Bootcamp All Rights Reserved Most Common Approaches To Valuation DISCOUNT CASH FLOW (DCF) RELATIVE OR COMPARABLE VALUATION REAL! OPTIONS
- 26. 26 @KenGloberman – Finance Bootcamp All Rights Reserved DCF Illustration: Inputs to the DCF Model DCF (1B) ESTIMATING NEAR TERM GROWTH (1A) ESTIMATING FREE CASH FLOWS Expected cash flows during extraordinary growth phase (2) ESTIMATING A STABLE GROWTH RATE (LONG TERM) Terminal Value (3) AT WHAT RISK? DISCOUNT RATE COST OF CAPITAL Discount the cash flows and terminal value to the present 0 1 2 3 4 5 6
- 27. 27 @KenGloberman – Finance Bootcamp All Rights Reserved Why does valuation matter at the early stage? o Simply put, it dictates how much an entrepreneur has to give up in exchange for cash o Common example • You are looking to raise $100,000 in exchange for 10% of your startup EARLY STAGEVALUATION IMPLIED PRE-MONEY VALUATION $1 MILLION $100K 10%= × IMPLIED PRE-MONEY VALUATION
- 28. 28 @KenGloberman – Finance Bootcamp All Rights Reserved SO HOW DO WE DEAL WITH VALUATION AT THE EARLY STAGE? JOIN FINANCE BOOTCAMP J EARLY STAGEVALUATION
- 29. 29 @KenGloberman – Finance Bootcamp All Rights Reserved Finance Bootcamp teaches you how to calculate valuation using the most popular methods: Discount Cashflow (DCF) and Relative Valuation. It also teaches the strengths and limitations of such methods. You will leave Finance Bootcamp having built your own models from scratch. Finance Bootcamp Takeaway
- 30. @KenGloberman – Finance Bootcamp All Rights Reserved Engaging with Investors Introduction
- 31. 31 @KenGloberman – Finance Bootcamp All Rights Reserved OBSERVATION YOU ARE NOT FULLY PREPARED TO ENGAGE WITH INVESTORS UNTIL YOU UNDERSTAND THE PROCESS AND DYNAMICS FROM ALL SIDES
- 32. 32 @KenGloberman – Finance Bootcamp All Rights Reserved The Entrepreneur/Investor Relationship What Each Brings To The Party 1. Concept (Proven/Unproven) 2. Execution Potential 3. Committed Leadership 4. Expertise 5. Financial Return 1. Money (Capital) 2. Business Maturity 3. Mentorship 4. Contacts 5. Industry Knowledge
- 33. 33 @KenGloberman – Finance Bootcamp All Rights Reserved Hi Net Worth Individuals Where Does the Money Come From? Corporate Venturing Hedge Funds Angel Networks Academic Endowments Family Trusts Pension Funds Fund of Funds Private Equity Funds Seed or Venture Capital Fund Typical Sources of Equity Capital Aggregators of Equity Capital Government Funds
- 34. 34 @KenGloberman – Finance Bootcamp All Rights Reserved Finance Bootcamp will help you engage with investors most effectively and evaluate options presented to you. We’ll further explore: Characteristics of Different Investors How Investors Mitigate Risk The Emotional Side of “Selling” Your Story How Investors Get Paid Finance Bootcamp Takeaway
- 35. 35 @KenGloberman – Finance Bootcamp All Rights Reserved CONVINCED TO JOIN FINANCE BOOTCAMP?
- 36. 36 @KenGloberman – Finance Bootcamp All Rights Reserved The Finance Bootcamp Program • Introduction • Corporate Finance Net Present Value (NPV) Fundamentals • Return On Investment (ROI) Applications DAY 1 – MORNING Following The Cash Flow DAY 1 – AFTERNOON Management Through Accounting LUNCH BREAK • Accounting Practicalities • Building Basic Financial Statements • Using Accounting to Manage Your Business • Bridging Accounting to Valuation • Relative Valuation Techniques • Discounted Cash Flow Valuation DAY 2 – MORNING Valuation Techniques DAY 2 – AFTERNOON The Investment Landscape LUNCH BREAK • Start-up Valuation and Cases • Selling with Numbers • Navigating the Fundraising Process • Term Sheet Fundamentals
- 37. 37 @KenGloberman – Finance Bootcamp All Rights Reserved Ken Globerman is an investment professional, independent consultant and educator specializing in corporate finance, business development and private equity issues. He splits his time between New York, NY and Warsaw, Poland, where he founded Global Group Ventures to help bridge economic development between the United States and Central Europe. Ken also lectures at Warsaw School of Economics in business valuation, conducts workshops in finance and leadership and is a frequent speaker at programs supporting entrepreneurship and innovation around Europe. He has been published in the Warsaw Business Journal and American Investor as a featured expert in business and finance. Previously, Ken worked for New York-based private equity firm Knox Lawrence International, LLC and WPP’s media subsidiary MEC (formerly Young Rubicam) where he managed research and planning projects for Fortune 500 clients. Ken holds an MBA in Finance Entrepreneurship from New York University’s Stern School of Business, where he served as Equity Valuation Teaching Assistant to Professor Aswath Damodaran, and Bachelor of Science in Applied Mathematics from Carnegie Mellon University. Finance Bootcamp Founder
- 38. 38 @KenGloberman – Finance Bootcamp All Rights Reserved “Ken provided great insight during his workshop. Not only because of his impressive knowledge but also thanks to his experience and innovative point of view developed thanks to cooperation with venture capital institutions. If you have a chance to get to his workshops, I strongly recommend to just do it.” “The workshop with Ken was a really important step on my way to developing a thriving start-up. I had a great opportunity to recall and organize my knowledge of the financial aspects of business. It was also my first contact with 'pitch' knowledge. I suppose it will allow my business to grow faster and to find an investor earlier.” “I recommend this workshop to people who want to think about valuation in new terms. During the weekend, we truly learned about valuation from a personalized, less academic point of view. Valuation, which was always a very financial topic for me, appeared to be something more. Something strongly influenced by people's behavior, just as any other aspect of life. I strongly recommend this course. What others have to say about Finance Bootcamp
- 39. BRING FINANCE BOOTCAMP TO YOU! Contact: Ken Globerman Twitter: @KenGloberman Email: Ken.Globerman@GlobalGroupVentures.com LinkedIn: http://www.linkedin.com/in/kengloberman