Archive for April, 2014

VALUING NEW STARTUPS AND EARLY STAGE BUSINESSES

Posted: April 28, 2014 by Avi Ram in Money, Startup

aviramThe valuation of a new startup determines the amount of equity in their company the entrepreneurs will have to sell to their investors. Determining the valuation is a black art rather than a science. In order to understand the “investment valuation” at funding the entrepreneurs must understand the funding process. This valuation should not be confused with some estimate of “current worth” of the company. Ask the question “If I tried to sell the company today, how much would I get?” and then compare that to the “Investment Valuation”. The “current worth” tells you what the company is worth today, the “investment valuation” some indication of the investor’s view of future value.

Entrepreneurial startups have little, if any, trading history so a valuation based on past performance is not possible. Similarly a valuation based on sector P/E ratios is not sensible because there are no results to apply a PE ratio to and in any case, these companies are often so innovative that there are no similar companies by which to judge a likely PE ratio.

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bill-cunninghamBoston stole the startup crown from Cambridge this past year by closing 97 venture capital deals in 2013 compared with 66 in 2012. Kyle Alspach, tech guru writer for the Boston Globe, penned a front page article describing the huge tectonic shift from Cambridge to Boston. Although Silicon Valley still reigns as the startup king, Cambridge has always enjoyed a vibrant startup ecosystem thanks to the talents and treasures attracted by MIT and Harvard. Former Boston mayor Thomas Menino wanted to

Kyle Alspach, Tech Guru Writer at the Boston Globe

Kyle Alspach, Tech Guru Writer at the Boston Globe

“create an irresistible environment” for entrepreneurs – changing the name of Boston’s Seaport district to the Innovation district. He rallied the politicians to build infrastructure, and real estate barons to convert warehouses into cool, high tech space. It turns out that the basics attract entrepreneurs, and Cincinnati would do well to take copious notes on Boston’s journey. (more…)

C4: The Creative Explosion

Posted: April 20, 2014 by Jim Friedman in Uncategorized

Jim-FriedmanCreatives are the newest business rock stars.  It wasn’t always that way.   Creativity used to be synonymous with art making.  You were creative if you could paint, write draw, sing or dance.  It’s different now.

IBM asked more than 1,500 CEOs what they believed was the single most important factor they wanted in a new hire.  Their answer?  Creativity.  The world is changing quickly. The future is unsure.  So creativity may be the single most important skill we can teach our students to prepare them for the world after graduation.

But, do we teach creativity?  Do our teachers value it?  Do they know how to foster it or even identify it? Do business executives?  Do you?  It’s not easy.

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