Report Is About Finance For Entrepreneurs - Myassignmethelp.Com

Question: Explain on Report Is About Finance For Entrepreneurs? Answer: Introduction This report is about the finance for entrepreneurs. The report focus on the ways by which Bit bounce raised capital for their business and mentions the benefits from it compared to an IPO. The report will identify the risk in the financial approach. It also includes the Instagram pivot and explains the business before and after pivot. In the end, the report entitles the start up plan for a business and explains the all the small and every needed aspect which has to be followed by the entrepreneurs. The report also mentions the lean canvas to understand the business fully and overcomes the problems. Describe how Bit Bounce raised capital and explain what is innovative about this approach. While raising a new round of equity fund for his company Bit Bounce, Stewart Dennis found himself in circumstances where each entrepreneur would describe an enviable position. While searching for the investor he met with Sequoia Capital and other top tier venture capital firms and a prior investor, and then he met the billionaire Tim Draper who has shown interest and ready to take part. He met several other people like Arthur and Kathleen Breitman who are the creators of Tezos and there are successfully raised $232 billion before the launch of their new blockchain network. While Dennis was raising fund for his crytocurrency-powered solution to email spam he avoid Silicon Valley not including Draper and turned instead to the crowdfunding method Tezos. The goal of Dennis is to raise $20 million by selling blockchain tokens over the internet to an innumerable number of investors. The approach of Stewart Dennis is innovative because he used ICO approach, rather take investment from one investor he tries to raise fund from several investors by selling his blockchain tokens (Owens, et. al., 2014). Detail the benefits of this approach compared to an IPO. ICO (initial coin offer) is a word that has recently achieved popularity in the cryptocurrency atmosphere. The word is used to classify a procedure of raising investments for some specific project. An ICO is repeatedly compared to an (IPO) initial public offering for stocks. Nevertheless, there is lot of difference between both the terms. Benefits of ICOs The fact that ICOs are open to the public. It means anybody in the cryptocurrency industry can take part if they can get finances transferred on time. With the ICO, the funds can be raised in a decentralized manner for the project. Moreover, the thought of cryptocurrency ICO means public can help form the future of this complete ecosystem. There is a broad variety of different projects raising funds through an ICO. Perhaps the biggest benefit is to speculators. Which is how the tokens can be bought at a low price? Identify all the risks in this financing approach. There are various risks include in this financing approach, which are as follows: No paperwork is required for getting an ICO. For a public security, it is important to have paperwork just to be official and legitimate. The lack of authoritarian lapse concerns a few market specialist and financial skill lawyers that can arise a question on the legality. However, the SEC remains far away from any ICO inquiry, it is said to be taking a solid look at the bigger use of such assistance, particularly with the expansion of ICOs surging in recent period. The liquidity for the ICO in the market has been limited and it has mostly small. In spite of the growing price of ICOs, the regulatory incalculability and be short of transparency generate downsides for offers. With possible looming U.S. securities set of laws, companies effort to instead register in overseas jurisdictions, most generally Singapore and Switzerland. However, revelation in ICOs usually have been restricted whether in the U.S. or elsewhere (Owens, et. al., 2014). Summaries the SEC July 25 report. Into this gold rush on July 25 came the Securities and Exchange Commission. In an inquiry, it finds that the groups made it obvious that a few tokens are securities and will require registering as such. The retail investors of America banned from partake in the ICOs for such tokens. If they do not follow this rule than they will be doing violation of federal law. The SEC singled out the DAO, a decentralized investment fund, which begins on the Ethereum network, as a bad actor. According to the SEC, DAOs crowdsale in 2016 compose a sale of unregistered securities. The pipeline for ICOs just got a lot smaller, said by Arnold Spencer, he is the general counsel for the bitcoin ATM network Coinsource. Although the report of July 25 was not breaking any new legal ground, he added it was a major turning point whereas some other investor treated the July 25 as a bombshell game changer (Owens, et. al., 2014). Search and identify at least 10 different startups that are using block chain. Provide their name, where they are based, what financing they may have received (if info available) and a one sentence description (value proposition) about the business. The 10 different startups that are using Blockchain are as follows: Helloblock is based in San Francisco and it is bitcoin infrastructure built particularly for developers. BTC Jam is based in San Francisco and offers P2P lending platform that has provided over $US5 million last year in bitcoin based loans. BlockCypher is based in California and it is one of the first platforms as a service infrastructure companies in bitcoin. Digital Tangible Trust objectives to be a liquidity contributor and marketing partner for hard assets. Ripple Labs Company is building commercial applications and infrastructure around the Ripple protocol. It is based in San Francisco. Bifubao is a Beijing based company. It is not just another wallet provider. It is known as Bitfoo globally. Coinbase is based in San Francisco. Company grows from small-hosted wallet company in 2012 and becomes one of the largest companies in ecosystem. BitPay is an Atlanta-based payment gateway, one of the first 3rdparty merchant support payment systems. BitPagos is also in the merchant solution space but instead of converting bitcoin into fiat, they are helping the mercantile to shift in the opposite way. Kraken is a completely complaint digital asset trading podium that goes ahead of easy market or bound instructions. What was Instagram pivot? Describe the business before and after their pivot. What was the name of the company before Instagram? Is this pivot consistent with the Lean Startup model? After all the measurements, the new image sharing service, Instagram, is exploding. After the launch of it, they had 100,000 users in week first, after a week, it was 200,000 and in third week of its launch, they had 300,000 users. After that, they made the Apples app of the week in the App Store. They are likely far past a half a million users already and it was not a bad initial month. However, Instagram was not Instagram at all. Instagram was firstly known by the name of Burbn. The co founder of Instagram Kevin Systrom and Mike Krieger choose to spotlight their multi featured HTML5 check in project, Burbn, on mobile photography. Systrom said that he and co founder Mike Krieger really give a years value of work into Burbn, lastly culminating in the making of a entirely native iPhone app. However, it just was not very superior in their opinion. Therefore, they throw the complete thing out and started over. Again, after a year of work. The outcome, just 8 weeks later, that was Instag ram. Yes, this pivot is according to the lean startup because Instagram firstly known by the name of Burbn but it was fail in satisfying their founder then they again work on it for a year and came with the successful launch and app name is Instagram (Pennell, 2012). Before the pivot, investors including Baseline Ventures and Andreessen Horowitz participated in financing of a $500,000 seed round. How many investments and exits has each group had? Can you identify any cultural differences between the two groups? The development of Instagram was begun in San Francisco, when the founders of Instagram focusing on their multi featured HTML5 check in project, Burbn. On five march 2010, Systrom closed a $500,000 seed-funding round with Baseline ventures and Andreessen Horowitz as functioning on Burbn. Systrom and Krieger jointly began functioning on a photo-sharing app four months later -- in July 2010. March 2010: Stanford University graduate Kevin Systrom closes a $500,000 seed round from Baseline Ventures and Andreessen Horowitz as functioning on a location-based app known Burbn. July 2010: Systrom and Mike Krieger, who too studied at Stanford, start scheming an app for sharing picture. Kevin Systrom posted the initial photo to Instagram on July 16, 2010. The photo demonstrates a dog in Mexico and foot of Systrom girlfriend's; the picture has been improved using Instagram X-PRO2 filter. October 2010: Krieger and Systrom launch the Instagram photo-sharing iPhone app with eighty first users. December 2010: Instagram publicize full picture support and sharing on Foursquare. The app reaches 1 million registered users In October Josh Riedel joined the company as Community Manager, Shayne Sweeney joined as an engineer in November and Jessica Zollman joined the company in august 2011 as a Community Evangelist (Bort, 2014). How did the owners of Instagram exit the business? Describe the decision variables including pointing out the risks in this exit. The team of Instagram just scored a huge $1 billion exit by selling it to Facebook in the year 2012. The lesson, which entrepreneurs can get from the CEO of Instagram, was Adapt and pivot when your initial idea does not work out. The risk in their exit, at that point of time Instagram had about a dozen of employees and over 30 million users. The exit of Instagram measured the Unbelievable Exit of the Year. They were doing really well in the marketing and users was increasing it might be possible that decision is taken for money purpose. Systrom was 28 only at that time and earned himself $400 million in the deal (Siegler, 2010). When Facebook bought Instagram, Facebook was doing really well with their business and on the way to becoming the number one social networking site and Instagram was only a photo sharing app. Might be possible that Systrom also has this thought in their mind while selling the Instagram. Summary of Business Plan Business: The Company Instacart is an American based company, which deals in a same day delivery service of grocery. Instacart provide facilities to their customer by delivering groceries through personal shopper. A customer needs to choose personal shopper will deliver groceries by a web application from various vendors and the selected items. In 2017, the company has services and operations in the USA. Apart from their website, customers can avail the service of Instacart primarily through a smartphones app, accessible on Android and on IOS platforms. Customers have the facility to pay the bill of groceries by using Apple Pay and Android Pay. Firstly, the customers of Instacart have to go to the store and buy the items, which ordered at vendor, 10 to 20 percent added a mark up for the delivery charges (Somerville, 2014). Now the business of Instacart has developed and company is performing well in the market, and company has maintained their relationships with the grocery stores that split their exiting markup, permitting the customers of Instacart to buy at in store prices. The former employee of Amazon, Apoorva Mehta started the Instacart. Organizations started their services in Palo Alto, San Francisco and Mountain View. The valuation by the investors of this startup company has $2 billion as of may 2015. The organization had about 200 workers in April 2015. The investors of the company are Kleiner Perkins Caufield and Byers, Dragoneer Investment Group, Valiant Group, Comcast Group, Thrive Capital, Angel Investor Martin Romero, Khosla Ventures, Y Combinator, Andreessen Horowitz and Sequoia Capital. $275 million was the total funding in January 2015 (Eme, et. al., 2016). Forbes named Instacart the most promising company in America. Whole Foods Market Inc. Company did partnership with Instacart and invested in the company in 2016. Instacart announced in September 2016, to an expansion in the North Chicago zone (Rougs, et. al., 2014). It was reported that in March 2017, company raised a huge amount of new financial support round of $400 million dollars i n new venture capital that appreciated the grocery delivery service at roughly around $3.4 billion dollars. Financial Metrics There are four important financial metrics, which helps in, evaluate a company: Liquidity on the balance sheet: The most important we look on the balance sheet is liquidity in the form of cash. To evaluate this we have to take out the current ratio. It is a measure of working capital. Essentially, it compares the current assets where they determined the assets, which convert into cash in the next year, along with current liabilities that are compulsion, which have to be paid in the next year. What a company wants to look for evaluating their performance is a 2:1 ratio of liquidity to debt. Where companies shows double the assets and single liability. Earnings growth and growth of net income on the Income Statement: The income statement of a company includes some important key financial metrics. The most important is growth of profit and the increase in the net income. What every entrepreneur wants to see if business is growing. Return on Assets: it is important to look on return on assets that is using two of the financial statements. Return on equity, return on capital and return on assets. These all are evaluated what the incomes are accomplishing. Operating cash flow from the cash flow statement: The last metric is to see the cash flow statement. Is the business bringing in real cash? Is the business generating cash by selling their products? What we have to look in the statement is operating cash flow in the business (Zott, et. al., 2010). Balance Sheet Lean Canvas Conclusion The report concludes the process used by the Dennis in raising money for his company Bitbounce. He use spam email and his target was to raise the $20 million by selling his blockchain. The report also includes the ten starts up plans their based location and their name. The report also clearly mentions the benefits of ICO approach for fund raising. In b section, the report concludes the Instagram pivot, shows the development of Instagram, and mentions the old name of Instagram that is Burbn. In last, there is a plan for business idea and name of that business idea is Instacart all the information related to idea is explained in the report including financial statements. References: Bhme, R., Christin, N., Edelman, B., and Moore, T. (2015) Bitcoin: Economics, technology, and governance.The Journal of Economic Perspectives,29(2), pp. 213-238. Bort, J. (2014) Instagram's Kevin Systrom: People Keep Asking If My $1 Billion Was Too Small. [Online]. Available at: https://www.businessinsider.in/Instagrams-Kevin-Systrom-People-Keep-Asking-If-My-1-Billion-Was-Too-Small/articleshow/38689569.cms (Accessed: 30 August 2017) Chesbrough, H. (2010) Business model innovation: opportunities and barriers.Long range planning,43(2), pp. 354-363. Dong, F., Hennessy, D. A., and Jensen, H. H. 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Somerville, H. (2014) Startup Instacart hopes to dominate grocery delivery. [Online]. Available at: https://azdailysun.com/content/tncms/assets/v3/eedition/7/36/7368a729-9b7d-591b-985c-b51abac3ced3/52eded3a91bd7.pdf.pdf (Accessed: 04 September 2017).