- (20%) Briefly discuss Private Equity (PE) in your own words and provide an example. Also, discuss the status of the PE market today What is the first thing to look at when selecting a company to fund and why? This should be at least 2 pages doubled spaced. Provide source links.
- (30%) CASE: Value Early-Stage Financing (Posted on Blackboard Week 2) company factors that go into place. In your own words discuss the Value Early-Stage Company Financing Case using the following topics: Try to relate this case and topics based on the current US economy and markets. (at least a paragraph for each part)
a. Briefly discuss the importance of Early-Stage Financing in the case providing a pro and con.
b. Free Cash Flows (FCF)
c. Terminal Value (TV)
d. NPV/DCF
e. Option Pools
f. Shares and Price
g. Multiple Rounds Financing
- (20%) Select a sector and company (small cap to mid-cap or so, $25B or less), and/or company that specializes in one or products or services. Provide past financials and transactions and analysis of the industry, sector, and company. Gather and provide Financials (Income statement, Balance Sheet, and Cash Flows) Select some important ratios that matter for your company and industry analysis. Discuss Benchmarking and trend analysis using the nearest competitive and/or industry. (About two pages)
- (30%) As a Private Equity Analyst, you can use the same company in problem 3. If not using the same company, you may simulate a hypothetical company and numbers The following are topics from finance course that you should have taken prior to this course. In any case we reviewed the topics. The only difference is now you are looking to value and how to fund the small company. For now, you can use a public company as an example as they do have financials available. Target, look past and forward at least 3-5 years for cash flows, determine WACC your required rate of return, terminal value and NPV, capital structure and decide what you should offer for the company and why? Briefly discuss the steps you go through for the target company and the outcome. Determine the a. NPV OR b. APV OR c. Venture Capital Method (VC) for a company value and what you want to offer and why? (You may do 2 or more parts for extra credit).
Sample Solution