Symbid Blog

Four reasons why cash is King

money


This is the first article in reply of a question we received (thanks Murali). The topic conceners the importanance of cash in the startup. Everybody knows that the cash is important for survival. The burn ratio is the constant focus of both investors and early stage entrepreneurs. However, there are other ways and reasons that determine the importance of cash.



By Daniel Faloppa, Financial Content Manager, Owner and Blogger of Equidam

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Posted over 6 years ago

The discount rate in the valuation of a startup


discount


This article provide an argument against excessive reduction in the valuation of startup when negotiating with investors. If you approach a VC or BA, you will probably hear that “I need to be compensated for the risk I'm taking” or “I want a larger return than that”. What does it mean? What’s the link between discount rate and required return and how it is related with the amount of equity you will have to grant them to seal the deal?



By Gianluca Valentini, Financial Engineer, Owner and Blogger of Equidam

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Posted almost 7 years ago

Flexibility in Financing: Convertible Securities and Warrants to Negotiate Your Loans

DebtEquity


There are several ways to accept external funds from investors. Debt is strict and it doesn’t really match a flexible structure like the one of a startup. However, there are some shortcuts where entrepreneurs and investors might find an agreement which would benefit both parties. The entrepreneur has a wide range of instruments which will facilitate the attraction of the most demanding investors.



By Gianluca Valentini, Financial Engineer, Owner and Blogger of Equidam

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Posted almost 7 years ago

Liquidation value, DCF and Multiples: Understand them

Cheese


Throughout the whole website we talk about valuation. But what does that actually mean? How can you value a startup? How can you put a price on a company? This article introduces a framework for the valuation of a company and explains some key concepts that are necessary to understand both real world situations and following up articles.



By Daniel Faloppa, Financial Content Manager, Owner and Blogger of Equidam

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Posted almost 7 years ago

What do we mean by risk?


RISK


“Risks have to be compensated”; “There is a difference between idiosyncratic and systematic risk”; “This return does not cover the huge risk I’m taking”. These are just three of the common statements about risk that everyone, sooner or later, encounters. But what is risk? And why is it so important? Understanding the concept and the importance of risk is pivotal for a startup approaching VCs. With this article, we try to answer the two questions above and to give a broad understating of financial risk.



By Daniel Faloppa, Financial Content Manager, Owner and Blogger of Equidam

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Posted almost 7 years ago