Week 30: Exits, Second Markets, M&A & Thunderlizards

Stanford GSB Sloan Study Notes, Week 10 (30), Winter quarter

Originally planning out March I was quite sure that next week will be a complex one, after all, it is still labelled in calendar as the “exam week”. In reality, the Winter Quarter pretty much culminated today, with the last Finance class where the entire Sloan class was together in the same lecture. We do have one more core in Spring, but it will be in sections, so between all electives and split schedules, it will be mostly social when we meet from here on.

This week was mostly about delivering papers and presentations. With one team we built a business plan and pitched a crowdsourced service for proofreading and language learning feedback to dyslexics, foreign students and white-collar immigrant workers. With another team, we designed an elaborate proposal for taking a real public company private, shifting their product portfolio for higher exit multiples, levering up the non-existant debt, restructuring operations (yup, the founder’s private jet and golf tournaments need to go) and getting out at 10X of our money in 5 years. With third group, we pre-analysed and went through 6 real startup pitches along with a real VC mentor and decided to maybe just to give money to one of them.

Despite of the chaos of trying to schedule ~20 people into these different groups at conflicting times, I really enjoyed actually doing stuff (as opposed to just discussing in class) with my MBA peers. The ease and breakneck speed at which almost anyone in this school can deliver complex quant models and high quality analysis still amazes me. And then you can pull pretty much anyone on stage with a 5 minute heads up to present the outcome with coherent, engaging story line.

I have jus two final exams this quarter, three hours of Entrepreneurial Finance (cap tables, term sheets and anti-dilution math) done last night and Core Finance (WACC, optimal portfolios, options and bonds) to be done next week. Then onto the East Coast study trip and the saddening final 10 weeks here.

Study notes covered in this issue:

  • Alternative equity markets filling the IPO gap
  • More Exit talk, especially Mergers & Acquisitions
  • Real pitches from real startups
  • Hunting for the Thunderlizards
  • Guests: Barry Silbert of SecondMarket, Peter Currie, Louis Elson from Palamon, Mike Maples of Floodgate

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GSB Book Recommendations to John Doerr

Last week, John Doerr of Kleiner Perkins was speaking in the View From The Top speaker series at Stanford GSB. (Video is yet to come online, but I shared some notes here.) As part of his speech, John gave his book recommendation to the audience and in return asked the audience to email him 3 book suggestions back.

I got curious and, as I sent in mine, also asked if he would share back what the rest of the school thought. Angela Valles from KPCB was kind enough to do just that (thank you!) and for sake of easier sharing, I dropped the entire thing as it was now to a Goodreads list – open for voting, sharing, reading and other good social things.

It is quite an eclectic selection of things we read and recommend our guests here at the GSB (between MBAs, Sloans, PhD students, faculty and guests of the day), I have to say. Just a few titles were mentioned more than once in first ~200 emails. There is a lot of to-be-expected business bestsellers, but also quite a few fiction titles. And what I like is the balance of seemingly extreme ends: physic lectures meet religious texts, Ayn Rand meets Karl Marx, US history matched with stories from Asia and Europe.

Enjoy: CLICK HERE FOR THE FULL BOOK LIST

 


Weeks 28-29: Bootstrapping, Europe(?!), Options & Private Equity Operators

Stanford GSB Sloan Study Notes, Weeks 8-9 (28-29), Winter quarter

So there: it takes about 28 weeks in Stanford to finally have someone mention Europe in any other context than a semi-joke about Greek macro environment in the short term. And these two weeks suddenly opened the floodgates: there was the first European company case this far, we spent some time on the (quite miserable) comparative venture financing stats between the continents and – most importantly – the rotationally geography-themed Sloan TGIF parties finally turned to the European night (affectionately dubbed as the “Estonia & the Rest of Europe” evening). Relieved with a sigh with my Swedish, Dutch, German, Swiss, French, Italian etc classmates: we have not entirely disappeared from the world map as seen from the West Coast yet, and will keep working on that threat.

Partially supported by the annual Stanford Entrepreneurship Week, the last weeks were super-exciting for the flow of external speakers – there is a separate post summarising those you should not miss. And we did do the Final View presentations of the LOWKeynotes program, including your’s truly’s 9 minutes on how hard it has been to adjust to somewhat surprisingly lacking digital living infrastructure here, coming from Estonia – videos for which will be online in 1-2 weeks. Stay tuned.

Covered in this issue:

  • Bootstrapping, venture debt and swimming against the tide in Europe
  • Exit planning and IPOs in venture deals
  • Thinking like a limited partner, structuring PE deals, operational turnarounds and the visible future of Private Equity
  • Derivatives and options – both financial and real
  • Academic research on VC compensation and incentives
  • Guests from: The Foundry, Avik Ventures, AngelList, Astia, Makena Capital, TPG, TSG Consumer Partners, Sierra Ventures, YouTube, Trulia, OpenLane, Fayez Sarofim, Accel, Meritech Venture Partners…

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Extracurricular Fireworks: Friendster, Prezi, Rovio, Bonobos + O’Reilly & Doerr

With the end-of-quarter groupwork frenzy I am behind on posting the academic lecture notes – hope to get to that this weekend. But meanwhile, as the flow of new thoughts from extracurricular guest visitors in just last seven days has been mind-blowing I’ll post them for your enjoyment.

See further for tips, startup plugs, book recommendations and videos from:

  • Jonathan Abrams (founder of Friendster, Socializr, Nuzzel, Founders Den)
  • Peter Halacsy, Peter Arvai (co-founders of Prezi, Hungary)
  • Peter Vesterbacka (Mighty Eagle, Rovio)
  • Andy Dunn (CEO and co-founder, Bonobos)
  • Tim O’Reilly (O’Reilly Media, O’Reilly Alphatech Ventures)
  • John Doerr (Kleiner Perkins Caufield & Buyers)

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