Growth model

6. Minority vs. control – (Part 1) Cap table, primary vs. secondary, rollover equity

FAQ: What’s the difference between primary and secondary? The difference between primary and secondary share purchases lies in the stage at which the shares are bought and the parties involved in the transactions: In summary, primary share purchases involve buying newly issued shares directly from the company, providing capital to the company. Secondary share purchases, […]

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9. Net operating losses

**Correction** In this section, there is a small error from minute 17 to minute 22 (roughly) involving how Deferred Tax Assets are projected going forward on the balance sheet and cash flow statement. I’ve included a short correction lesson at the end of the Growth Model section. If you are following along with each lesson

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8a. Employee option pool

FAQ: What are employee options? Companies grant employees options as a means of giving them ownership in the company. They serve as an incentive for employees, aligning their interests with those of the company’s long-term success. At the time of investment (and sometimes more often), companies usually “refresh” their employee option pool. This means they

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16. IPO exits

FAQ: Why are you counting the cash from options proceeds 3 times in the IPO scenario? Is that too many? First of all, just so that we’re clear, above we have 2 different scenarios: 1) M&A exit, 2) IPO exit. In the M&A exit, it’s clear that the cash from options proceeds should be factored in.

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