1. Primary sources
    1. Founders
    2. Family
    3. Friends
    4. Foolhardy
  2. Valuation
    1. Methods
      1. Earning capitalization valuation
        1. Small privately held businesses
      2. Present value of future cashflows
      3. Market comparable valuation
      4. Asset based valuation
        1. Reflects the past not the future
        2. Static not dynamic
        3. Amount someone is willing to pay for their assets
    2. Parameters
      1. Opportunity
      2. Risk
      3. Purchaser's financial resources
      4. Future strategies for the company
      5. Time horizon of the analysis
      6. Alternative investments
      7. Future harvests
    3. Constraints
      1. NO financial history
    4. Critical questions
      1. Growth rate of the industry
      2. Company's growth rate
        1. Above the average
        2. Below the average
      3. Adjustments needed
        1. Adjusted earnings
      4. Balance sheet compared with industry averages
      5. How is the purchase being financed
      6. New owner's strategy
  3. Stages
    1. Seed stage
    2. Start ups
    3. First stage
    4. Second stage
    5. Third stage
    6. Mezzanine
    7. Bridge
  4. First financing
    1. Family and friends
    2. External sources
      1. Services at reduced rates
      2. Vendor financing
      3. Customer financing
      4. REdeced rents from an landlord
      5. Starting out in an incubator
      6. Leasing equipment
      7. Government programs
    3. Informal investors
      1. Familly
      2. Friends
      3. Work colleague
      4. Stranger
      5. Treat like a loan
      6. Advice about potential risks
    4. Business angels
      1. When do they invest?
        1. Seed stage
        2. Not yet mature enough
      2. Who they are?
        1. Welthy people
        2. Entrepreneurs
        3. Group of rich people
      3. How to reach them?
        1. Find out information about the BA
        2. Ask other entrepreneurs
        3. By sending business plans
        4. Presentations to the group
      4. How much money?
        1. min: 100.000$
        2. max: 2M$
        3. Satisfied with lower returns than venture capitalists
          1. 3:1
          2. 10:1
        4. Invest for nonfinancial reasons
      5. Types
        1. Approach
          1. Silent investors
          2. Part-time consultant
          3. Full-time partner
        2. Categories
          1. Entrepreneurial
          2. Entrepreneurs
          3. Invest in new businesses
          4. Knowledge about the industry
          5. Corporate
          6. Managers of larger corporations
          7. Become part of the full-time management team
          8. Have never worked in
          9. Small companies
          10. Few resources
          11. Professional
          12. Silent partners
          13. Independent workers
          14. Enthuasiast
          15. Retired or semiretired entrepreneurs
          16. Hobby
          17. Micromanagement
          18. Own business
          19. Invervene a little bit on the company
      6. Clues
  5. Venture capitals
    1. Not for
      1. Start ups
      2. Seed stage
    2. Invests in companies already in business
    3. What is for?
      1. Accelerate commercialization
        1. Products
        2. Services
      2. HighTech companies
    4. Factors
      1. Management team
        1. Well identified management team
        2. Help to recruite a key member of the team
      2. Target market
        1. Fragmented
        2. Accesible
        3. Growing rapidly
      3. Product/service
        1. Better than competing products
        2. Protected by copyrights or patents
      4. Competitive positioning
        1. No dominant competitor
        2. Open distribution channels
        3. Experienced marketing manager
      5. Financial returns
        1. 7x
        2. 5 years
      6. Business plan
        1. Completely written business plan
        2. Don't forget your business
    5. Clues
      1. There is not one set of ideal criteria for a company
      2. The management team must be excellent
      3. Getting attention dependes on
        1. How fast grow the industry
        2. How fast grow the company
      4. Focus on sales vs profitablity
    6. Dealing with VC
      1. Look for references
        1. Accountants
        2. Lawyers
        3. Bankers
        4. Entrepreneurs
        5. ...
      2. Don't use finders
        1. Get part of the deal
        2. VC don't like
      3. First meeting
        1. Informal discussion
        2. Invitation to a formal presentation
      4. Formal presentation
        1. As good a presentation as possible
        2. Carefully scrutinizing the entrepreneur
      5. Benefits to look for on a VC
        1. Value added
        2. Patience
        3. Deep pockets
        4. No mor than 6 portfolio companies
        5. Accesibility
    7. Negotiating the deal
      1. Valuation of the company
      2. Term sheet
        1. Main conditions for the deal
        2. How much money VC invest
        3. Convertible preffered stocks
        4. Provisions
    8. Follow on rounds
      1. Subsequent rounds of VC
      2. Meet milestons
      3. IPO window
      4. Valuation has increased
    9. Harvesting investments
      1. IPO
        1. Upside
          1. Financing
          2. Follow on financing
          3. Realizing prior investments
          4. Prestige and visibility
          5. Compensation for employees
          6. Acquiring other companies
        2. Downside
          1. High expenses
          2. Public fishbowl
          3. Short-term horizon
          4. Post-IPO compliance costs
          5. Management's time
          6. Takeover target
          7. Employee dissatifaction
      2. Acquisition
        1. Managers can focus on what they do best
        2. Founder and CEO position
        3. Additional capital
        4. Investors pay in cash
        5. Inmediat cash for entrepreneur and employees
        6. Employment agreement
        7. Different cultures
        8. Lower expenses and commisions
      3. Buyback
        1. Rare
        2. Need of cash