Concentration and diversification
Investors need to balance concentration and diversification in their portfolios. The appropriate balance is based on your appetite for risk and how confident you are in »
Accounts payable are interest free loans
Businesses typically pay invoices within 30 to 90 days. In effect, these accounts payable are interest free loans issued by suppliers. For small firms to gain »
Pro-rata rights
Pro-rata rights allow existing investors to purchase shares to maintain their current ownership percentage in a company during subsequent rounds of financing. These rights provide investors »
Pay-to-play provisions
Today we talked about pay-to-play provisions in VC term sheets. These provisions require investors to invest in subsequent financing rounds or risk having their current preferred »
Why are financials released quarterly?
Why are financials for public companies released quarterly? My guess is this started for practical reasons when updating balance sheets, income statements, and cash flow statements »
Assumptions in financial models
Financial modeling is useful, but it can also be incredibly arbitrary. In computing discounted cash flows, adjusting assumptions by a few basis points can dictate whether »