Valuation of Privately Held Companies 

Privately held companies need to be valued every time they receive a financing, a substantial change of ownership, and when they are sold. This lecture suggests some frameworks and considerations for valuing privately held companies three ways: By market analogy, by earnings potential, and by asset replacement. These classical approaches are augmented with a short discussion of the case of a company that is losing money and a retrospective on the "dot com mania" that dominated the NASDAQ from 1998 thru 2000.  [Presentation]

Big Bubble Potential 

WTO, unsustainable rapid growth, and escalating inequity conspire to make forecasting the economics of China or, even, Beijing for the remainder of this decade very difficult. Today's "Real World" complexity and uncertainty present technical challenges. A process is presented beginning with a statement of First Principles, then Basic Assumptions, followed by a bifurcation of remaining issues into cycles and diffusions. This is applied to the "real world" case of the Beijing Real Estate (residential) market.  [Presentation]

The Financial Challenges and Policy Needs of High Technology Ventures

One critical challenge of Beijing's Tenth Five-Year Plan is to create opportunities in Zhongguancun for information industries. Beijing has a vision of a becoming "China's Silicon Valley." To date, Beijing visions have been consistently exceeded by her accomplishments. This new ground, however, presents a new set challenges in financing, market, government, and cultural domains which are unlike the basis of the great commodity and infrastructure successes of the past two decades. This lecture begins with a review of California's Silicon Valley. Then, we review the life cycle of a typical successful (success is not necessarily typical) venture to provide a context for appreciating its financing and policy needs. In particular, we examine the sources of funding and the resulting proforma financials (for the 49 K Byte Excel© spread sheet click here). We conclude by deriving policy and financial recommendations that are more aggressive than Silicon Valley or USA.  [Presentation]

Corporate Governance for China in the new WTO Era 

Corporate Governance takes on a higher importance now that China belongs to the WTO. This is because as trade occurs between companies across borders and at large distances, trust becomes more difficult to achieve. The way that WTO companies can trust each other is to have confidence in the manner of Corporate Governance (and its companion, Financial Disclosure, our previous talk). This talk discusses the Corporate By-Laws and the workings of the Board of Directors (including auditors) as the two main corporate structural means to effect good Governance. Also of significant effect are the culture and example of leadership.   [Presentation]

Securities’ Disclosure in USA - From the Businessman’s Perspective 

T he disclosure requirements for private and public equity financing and periodic disclosure (annual and quarterly reports) are presented. Also discussed are the substantial benefits to the entrepreneurs and the investors for such disclosure. It ends with the "down to earth" costs to the venture, entrepreneurs, early investors, and regulators. Noteworthy are the "real world" benefits of government regulation in substantially increasing the size of the pool of risk capital (as the work of recent Nobel Laureates predicts).  [Presentation]