1、 外文翻译 原文 The 9 secrets of PRE-IPO investing Material Source: Author: Ideas Capital Action Company Pre-IPO Investing Secret 1 Find the Best Deals by Being in the Right Places In February 2008, Martha Stewart Living Omnimedia, Inc. Announced that it had acquired all of the assets related to the busine
2、ss of Chef Emeril Lagasse, other than the restaurant and foundation-related assets, in a deal that could be worth as much as $70 million. When asked about Marthas history with Emeril,she revealed that she met him over 20 years prior, before he had even opened his first restaurant, and thus already h
3、ad an established relationship with him. Martha Stewarts organization was better suited than competitors to acquire Emerils company due to its established relation ship. Likewise private company investors who are well networked are much more likely to find great new investment opportunities. The fol
4、lowing factors help individuals or institutions find the “cream of the crop” deals: (1)Relationships: knowing the right people, those who in turn know the “cream of the crop” entrepreneurs (2)Reputation: track record for doing high-quality deals (3)On line Reach: maintaining a prominent website that
5、 entrepreneurs and others frequent (4)Off line Reach: attendance at trade shows and networking events By establishing themselves as authorities in the private investing space and being in the places where great entrepreneurs congregate (on-line, at events, etc.), shrewd individuals and investors bec
6、ome privy to special situation investment opportunities that the general public doesnt hear about until much later. Pre-IPO Investing Secret 2 Determine if the Business Plan Is Solid Before considering an investment in any firm, it is critical to ensure that the business plan and model are sound. Re
7、gardless of how “whiz-bang” the firms products or services appear to be, when reviewing the business plan, astute investors require that the following three conditions are met: (1)There is a large and growing market for the firms products and services (2)The firm has a sustainable competitive advant
8、age (3)The firm has developed realistic financial assumptions (4)Large and Growing Market Large and Growing Market The business plan must prove to investors that the company is positioned in a large and growing market and that there is a clear and compelling need for the product or service. In accom
9、plishing this, investors must first review the “relevant” market size in which the company competes. For example, though the U.S. healthcare market is a trillion dollar market, there is no company that could reap $1 trillion in healthcare sales. Rather, the “relevant” market is the specific niche of
10、 the healthcare market in which the firm competes (perhaps drilling down to medical devices and then medical devices that pertain to a specific medical ailment). Investors should beware of companies who claim they compete in broad, massive markets, because it often means that they dont fully underst
11、and their market nor their realistic potential. In addition to assessing the relevant market, investors need confidence that this market is growing and that there is a real customer need for products and services in the market. This should be assessed by reviewing third party research by credible so
12、urces (e.g., not the companys “opinion”) regarding the market size and trends. Likewise, data regarding the number of customers in the market, the demographics of these customers, and what products and services these customers are purchasing now to fulfill their needs are all critical to confirming
13、that a market truly exists for the companys offerings. Sustainable Competitive Advantage Many businesses that seek outside financing have unique concepts, but are not positioned for sustainable competitive advantage, which is critical to potential acquires and/or public markets. To begin, a business
14、 that states that it has no or few competitors should be questioned, since this may imply that a real market may not even exist. Rather competitors must be assessed as any firm who is providing products and services that fulfill the same need(s) that the company fills or plans to fill. Likewise, inv
15、estors must be assured that not only is there an unmet customer need that the company can fill, but that the company has or will build sustainable competitive advantage that allows it to outperform competition in both the short-term and the long term. Realistic Financial Assumptions It is critical t
16、hat a firms financial assumptions and projections be unrealistic. Plans that show penetration, operating margin and revenues per employee figures that are poorly reasoned, internally inconsistent or simply unrealistic greatly damage the firms chance of success. Importantly, imperfect financials ofte
17、n result in the firm running out of cash, which is perhaps the primary reason why new ventures fail. Pre-IPO Investing Secret 3 Assess Whether the Management Team Will Execute The key is that companies are made up of people, and if the management team is great, often the company is great. Likewise,
18、with a poor management team, the chances of success are dim. As such, investors need to really assess the quality of the management team when determining whether or not to invest in a private company. Questions regarding the management team should include: (1)What are the backgrounds of the manageme
19、nt team? (2)Are they respected leaders in their field? (3)Do they have a track record of success? (4)Have management team members successfully worked together in the past? A strong management team is almost always a sign of a strong business opportunity. If the opportunity wasnt solid, then these ta
20、lented individuals would be smart enough to focus their energies elsewhere. Pre-IPO Investing Secret 4 Understand the Exit Potential Investors in private companies reap rewards when the companies in which they invest have an “exit” or “liquidity event” which primarily consists of being acquired by a
21、nother firm or going public. At this point (or soon thereafter if a holding period exists), investors reap financial windfalls from the event. When investing in private companies, it is crucial to understand the exit potential of the firms under consideration. Of specific importance include the foll
22、owing: (1) How long might it take to reach a liquidity event? Clearly if the company being funded is in the earliest stages of creating a prototype, it might take years for the company to perfect the product and/or penetrate the market. In such a case, investors must be prepared to not cash out for
23、a longer time period. (2) How might the company exit? Issues to consider here are what types of companies might be interested in buying the company in the future, and if these companies have a history of buying other companies, or prefer to create competitive products instead. Finally, if the expect
24、ed exit is an IPO, investors must be prepared to potentially hold on to the investment longer as the timing of an IPO might depend on state of the public stock markets when the IPO is under consideration. Such is the case with the companies listed above. Fortunately for these companies and their inv
25、estors, the companies are successful and will probably exit for very significant multiples of their initial investments. Pre-IPO Investing Secret 5 Negotiate a Fair Valuation “I recently met a company that I really liked; an innovative online financial services product. It hit a lot of my criteria f
26、or investment; it had a working product, it paralleled existing offline behavior, and it had achieved some early success in gaining distribution. And it had done all this on just $1.5 million of angel money. However, although I really liked the company, I didnt seriously pursue an investment. The re
27、ason is that the $1.5 million was raised at a $30 million valuation. The company was still very early stage, with very limited usage and an unproven revenue model. Any sort of investment that we would have made would have been at a much lower valuation than $30 million.” (Source: Light speed Venture
28、s blog) Private companies often take advantage of novice investors by raising capital at valuations far above fair market given their early stage and risk factors. As you can see from the story above, this often hurts both the early investor and the company, because it puts the company in a challeng
29、ing position to raise more capital if and when needed (see Pre-IPO Investing Secret #7; Access the Probability of Raising More Capital). The key point to consider here is the valuation which the company could warrant if and when it hits the milestones laid out in its business plan. This future valua
30、tion must be significantly greater than the current valuation for it to be a viable investment opportunity. Pre-IPO Investing Secret 6 Conduct Due Diligence In 1998, P was founded with the goal of better distributing high-quality video over the Internet using new technologies. Unfortunately for inve
31、stors who gave Pixelon $16 million, the technology it presented was fake. Further, the companys founder, Michael Fenne, was actually David Kim Stanley, a convicted felon involved in stock scams who was running from the law. To make matters worse, Pixelon spent over a million dollars on a Las Vegas l
32、aunch party peppered with stars like Tony Bennett, Kiss and The Who. While the Pixelon example is far from the norm, it provides a critical lesson to private company investors: do your homework. In investing, this homework is known as “due diligence” which is more officially defined as the detailed
33、analysis and appraisal of a business which takes place after an investment has been agreed to in principle. This process ensures that there is nothing which contradicts the investors understanding of the current state and potential of the business. In conducting due diligence, the following is a sho
34、rt list of items the investor must review: (1)Background of the company (2)Background of management (3)The Companys business plan (4)Audited and unaudited financials since company inception Management discussion of company performance Capitalization Table Leases Employment agreements Purchase or sal
35、e agreements Previous letters of intent Status and quality of patents and/or other international property filings Quality of technology (as assessed by experts in the field) By conducting comprehensive due diligence, investors significantly reduce their risk and thus maximize their chances of succes
36、s. Pre-IPO Investing Secret 7 Assess the Probability of Raising More Capital Akamai Technologies was launched at MIT in 1998 and held an IPO just 18 months later. But even during this short period, Akamai required FIVE rounds of financing in order to raise the capital it need to perfect its product
37、and prove it was ready for the public market. Akamai is now valued at nearly $5 billion. It is rare that a private company will raise just one round of cap ital and then exit (e.g., go public, sell the company, etc.). Rather, most companies raise several rounds of capital in order to grow and raise
38、their valuation before exiting. Furthermore, a key reason why many private growth companies fail is due to a lack of adequate funding. As such, when investing in early state private companies, savvy investors assess the probability that these companies will raise capital in the future. One key to th
39、is assessment is the sector in which the company operates. For instance, in the software sector, there are numerous venture capital firms, strategic investors and private equity firms willing to finance later stage deals. Conversely, in the retail food sector, there are fewer later stage financing o
40、ptions. Pre-IPO Investing Secret 8 Diversify Your Private Company Portfolio How many times have you heard someone say, “Dont put all your eggs in one basket“? When it comes to any kind of investing, this is very good advice. Successful investors know that diversifying their investments can help redu
41、ce the impact that a single, poorly performing investment can make on their overall portfolio, or mix of investments. This is particularly true with private company investing. Private equity investing is inherently variable - with a relatively small percentage of companies building themselves to suc
42、cessful exits and investment harvesting. Most individual investors in private equity significantly under-diversify their portfolios - investing in one or only a handful of companies and thereby greatly increasing their risk profile. In private company investing, investors are taking big swings. Ther
43、e are big risks with early stage unproven companies, but also massive rewards when they succeed. Investing in just one private company is simply way too risky. Rather, having a portfolio of these firms is often a solid strategy. Since successful private company investments may provide a return of 10
44、 to even over 1,000 times the initial investment, investors often win big if only a small percentage of their investments succeed. Pre-IPO Investing Secret 9 Monitor Your Investments Private companies do not undergo the same scrutiny that public companies do. There are no quarterly reports. There ar
45、e no watchdogs. In addition, the real progress of small, closely-held companies is extremely difficult to monitor and measure. Communications between private company management and their investors too often is mostly of a promotional form - with investors rarely getting a balanced review of the grow
46、th and profitability challenges of the companies. Therefore, investors in these companies must keep in contact with the CEOs to understand their progress and ensure that their focus does not veer off course. They must set specific milestones and follow-up if the companies do not achieve them. 译文 直投业
47、务的 9个秘密 资料来源 : 作者： 资本思想行动公司 直接投资 的第一个秘密 在最佳地方发现商机 2008年 2月， 玛莎史都华生活全媒体 公司宣布以高达 7千万美元的价格取得了 艾梅里尔 拉加西厨师 拥有的除了餐厅及其相关联资产以外的所有资产。当问及 艾梅里 和玛莎的历史时，她说他早在 20年前他还没开第一家餐厅前就与他相识了，从此他们俩就有了联系。 与竞争对手相比， 玛莎史都华生活全媒体 公司获得 艾梅里尔 公司的优势在于其与 艾梅里尔 建立的关系。同样的，有良 好关系网的私人公司投资者更有可能找到大量的新投资机会。下列因素为个人或机构发现最优秀的商机提供帮助： (1)关系：结识正确的人
48、，那些认识优秀企业家的人 (2)声誉：有做过优质交易的过往记录 (3)网络平台：维持一个有企业家和其他人时常光临的杰出的网站。 (4)离线平台：参加展会和社交活动。 通过在私募投资行业和有杰出企业家聚集的地方建立自己的机构，精明的个人和投资者对特殊时机的投资机会比普通公众更早知情。 直接投资 的第二个秘密 判断其商业计划是不是稳定的 在考虑投资任何公司前，关键是 要确保商业计划和模型是正确的。不管有多“下文”公司的产品或服务的出现 ，当评估商业计划时精明的投资者要求公司满足以下三个条件： (1)公司的产品和服务有一个巨大而日益增长的市场 (2)公司有持续的竞争优势 (3)公司拥有实际的财务假设
49、 巨大并日益增长的市场 公司的商业计划必须向投资者证明公司的产品或服务在巨大而日益增长的市场上有清晰而又令人信服的需求。完成这个之后，投资者必须首先审查与其相竞争的公司的相关市场的大小。例如 ,虽然美国医疗市场是一个数万亿美元的市场但没有任何公司能从中获取 1万亿美元的医疗保健销售 收入。更确切的说，这个相关市场是该公司与竞争公司相比在医疗保健市场的具体利基（也许先进的医疗设备和适用于特定医疗疾病的医疗器械）。 投资者需提防那些宣称自己在广阔市场上竞争的公司，因为它们不完全了解它们的市场和它们的实际潜力。此外评估相关市场 ,投资者要有信心市场是不断发展的，市场对产品和服务有真正的需求。这应该由第三方通过对市场容量和趋势分析的可靠资料进行评估（如，不是公司的观点）。同样的，有关市场上消费者数量和统计资料，现在这些顾客购买什么产品和服务以满足他们的需要，这是确认该公司的产品及服务真的有市场的 关键。 可持续的竞争优势 许多企业寻求对外融资 ,而不是定位于持续的竞争优势。持续的竞争优势对于潜在收购方和公开市场的才是关键。首先，一个企业声称他没
