Date post: | 17-Jan-2016 |
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Why Innovation thrives in U.S.
Innovation & GDP GrowthCars
TechnologyGoods
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Innovation =>↑ full potential
Raising Money for New Ideas
How innovation happens in the USA
Innovation & USA
• Financial Capital is needed to start a new businesses– Without money => ideas can’t become reality
• Ideas for a new business easily raise money in USA– Google, Apple, Microsoft, Facebook, Bloomenergy etc…
Step #1: Start with money from friends, family & fools
Typical path to start a Company
Step #2: Raises more financial capital from angel investors
Step #3: Sell some of business to venture capital firms
Step #4: Grow business & launch Initial Public Offering (IPO)
Venture Capital Firms (VCs)
• Investment Funds which “lends” money to select startup companies with high growth potential
• The VC gives money in exchange for partial ownership– stock options in company
• VC often has a say in Management
IPO’s
• Transforms a company from private to public– Stock is publicly traded
• New corporate rules apply– Must report earnings every 3 months
– Inside information rules apply
Recent IPO’s
IPO
Company was overvalued•3rd largest IPO ($16 billion raised)
Sold at : 104 billion market capitalization 100 PE ratio
Zuckerberg owns 24% CompanyControls 56% of voting stock
New Option: Crowdfunding
• Movie which follows an actual start of a dot.com company
Movie
Top 10 Lessons from Movie