INTERMEDIATE FINAN.MGMT.(LL)-W/MINDTAP
14th Edition
ISBN: 9780357533611
Author: Brigham
Publisher: CENGAGE L
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Chapter 20, Problem 6Q
Summary Introduction
To evaluate: Convertible securities are issued in order to sell the common stock at a price higher than the current market price.
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QUESTION 1
Examine the information provided below and answer the following question.
(10 MARKS)
The hockey stick model of start-up financing, illustrated by the diagram below, has received a lot of attention in the
entrepreneurial finance literature (Cumming & Johan, 2013; Kaplan & Strömberg, 2014; Gompers & Lerner, 2020). The model
is often used to describe the typical funding and growth trajectory of many startups. The model emphasizes three main
stages, each of which reflects a different phase of growth, risk, and funding expectations.
Entrepreneur, 3 F's
Debt(banks & microfinance)
Research Business angels/Angel Venture funds/Venture capitalists
Merger, Acquisition
Grants
investors
PO
Public market
Growth (revenue)
Break even
point
Pide
1st round
Expansion
2nd round
3rd round
Research
commercial idea
Pre-seed
Initial concept
Seed
Early
Expansion
Financial stage
Late
IPO
Inception and
prototype
Figure 1. The hockey stick model of start-up financing (Lasrado & Lugmayr, 2013)
REQUIRED:…
critically discuss the hockey stick model of a start-up financing. In your response, explain the model and discibe its three main stages, highlighting the key characteristics of each stage in terms of growth, risk, and funding expectations.
Solve this problem please .
Chapter 20 Solutions
INTERMEDIATE FINAN.MGMT.(LL)-W/MINDTAP
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