2Q.18 Flashcards
What is required of Chinese nationals working on sensitive US tech in both commercial application and academic research?
A license
Who owns Keurig Green Mountain and when did they buy them?
JAB Holding Company purchased in 2016 for $14B
Where are the Rohingya from, and where have they migrated?
Because of the genocide in Myanmar, specifically the Rakhine state, they are migrating to Bangladesh, Kuala Lumpur, and Malaysia (another muslim majority country).
What is “Amor Fati?”
Love of fate, not only an acceptance of suffering and loss in ones life, but a love of it. Nietzsche suggested wel love both the bd and the good as they are inextricably linked.
In what direction is the IRR for pharma RnD going and why?
Moving lower toward the cost of capital, projected at 0 IRR by 2020. Driven by biology being very hard.
What % of the population in the U.S. has tried pot, and what % currently use?
> 50% tried it, around 22% currently use at least “once or twice” in the past year. 10% are “regular users” at least once or twice in the past month.
What is Hashimotos?
Hashimotos, or hypothyroid is when the immune system attackes the thyroid gland, reducing it’s ability to produce metabolism stabilizing hormones. Hyperthyroidism is known as graves disease, and is prevalent in countries with iodine deficiency.
What are the main points made in the 2015 Iran Deal
Iran to cut centerfuges by 2/3, however these are older centerfuges
Iran to eliminate all but 5% of it’s enriched Uranium
International inspectors will have access to enrichment sites for 15 years
In return, Iran gets access to internation oil markets, financial and commerce sanctions lifted, but arms embargoes removed more slowly.
What is a secondary market investment in PE, and why are they popular?
A secondary market investment is either buying an interest in a company from a direct investor in the company, or buying an LP interest in a fund. The benefit is to get access to a known and mature deal, reducing the novel risk associated with a primary investment.
What is Jeff Bezos’ binary decision making criteria?
Is the decision reversable or irreversable. If it is irreversable, spend a large amount of time debating. If reversable, make decisions with less criteria and fail quickly.
How is big energy shifting it’s business strategy?
Low oil has hit upstream (E&P) profitability, driven to 0. Downstream (refining and marketing) has improved as input prices have decreased but it has not compensated equally. New strategy is to invest in refining and marketing, including gas stations, especially in developing markets.
What was the most profitable private equity deal and why?
Blackstone’s investment in Hilton, taking it private in 2007. Used massive leverage in the deal, investing $5B with the remaining 26B purchase price as debt. Restructured most of the debt in 2010, buying back for cents on the dollar, continued to buy back debt as opposed to pay dividends. Went public in 2013 for $20B, just sold remaining shares in 2018 for 14B in profits.
What did the court mandate songwriters and music publishers receive in royalties from streaming services?
Increased from 10% to 15% minimum.
What are the 5 levels of autonomous driving?
Level 0 = fully manual
Level 1 = minimal system controls over mechanisms. Ex: Cruise control, or adaptive cruise control
Level 2 = ability to automatically steer and change speed, but human prepared to take full contro. Ex: Tesla Autopilot, GM Super Cruise
Level 3 = monitors environment, detects and alert driver of challenges that require intervention. Allows for passive driver. Some suggest passive driver not able to quickly make decisions.
Level 4 = fully autonomous, but limited in some way (driving speed, conditions)
Level 5 = 100% autonomous in any condition
Who was Nelson Rockefeller
Born 1908, Grandson of Standard Oil founder John Rockefeller, VP to Ford, liberal republican (believed in public spending on education), died at 70 having sex with a 25 yr old mistress
What is Tom Brady’s sports venture? What other sports stars are in venture?
Religion of sports, founded with Michael Strahan and Gotham Chopra to tell sports stories from around the world.
Kobe Bryant = Production company,
Derek Jeter = Media company where athletes provide content
David Ortiz = Baseball venture fund
What is the name of Africa’s largest retailer?
Jumia. Only 0.5% of retail was online in Africa in 2018, but expected to grow steadily as there are no brick and mortar stores to replace.
What profits from the sale of LLC interest is classified as capital gains vs. ordinary income as per section 751?
As long as interest has been held for longer than one year, all proceeds from sale are taxed at capital gains except for the amounts allocated to “hot assets”, including unrealized receivables (cash basis accounting only), substantially appreciated inventory (FMV is 120% above basis), and depreciation recapture where the difference between sale price (fmv) and tax basis does not exceed the amount of depreciation. Ex: if sale price is 100, tax basis is 40, depreciation is 20, owe income tax on 20 (amount of depreciation realized).
The purpose of the hot asset rules in section 751 is to avoid a member selling interest and receiving capital gains for assets that would have generated partnership “income” if sold at FMV.
How is income characterized from the sale of LLC partnership interest per section 751?
As long as the partnership interest has been held for longer than one year, all gains characterized as capital gains except for “Hot Assets”, including
What is an ISO, and what are the tax implications?
ISO = Incentive Stock Option plan.
Must be;
- Granted within 10 years of issue
- Exercisable within 10 years of grant (or 5 yrs for 10% owner)
- Transferrable only by will or law of descent
- Grantee must be employee up to 3 months before exercise date.
- Must be sold more than 1 year after exercise date and 2 years after grant date.
If all conditions are met, gains are taxable at capital gains rates.
What is the difference between pre and post-money valuations on venture finance rounds?
When entering into a financing round, the pre-money valuation is the agreed upon worth of the company before the new capital is injected.
The post-money valuation is the pre-money valuation + actual cash injected into the business.
Ex: investor 1 injects 500k in cash for 100% of business in round 1.
In round 2, investor 2 injects 200k. Pre-money valuation is $1M (valuation of investor 1’s interest after round 2). Post-money valuation is $1.2M (valuation of full company after round 2).
After round 2, investor 1 = 83% (1M/1,2M valuation), investor 2 = 16% (200k/1.2M valuation).
Differences between start up financing rounds
Seed round - F&F initial capital
A Round = Funding from more traditional VC (Greylock, Sequoia etc.)
Business plan for scale and profitability developed, Raise between 2&15M on average
B Round = Typically led by same as A, but some new later stage specialty Venture firms can come in.
Extension of A - target market, scope etc. more clearly defined.
Raise between 7&10M on average
C Round = Later stage, hedge funds PE firms, investment banks can get involved.
Pre-IPO or pre-profitability round. Used for explosive scale or even MnA.
Raise single digit to hundreds of millions.
Where is Apple pushing advertising?
In app advertising, traditionally dominated by Google 35% of mobile ad mkt) and Facebook (25% of mobile ads). Apple made $1B from ads on app store suggestions last year, hoping to profit big from in-app ads, where it will share revenue with app owner.
What was the cause of the 1980’s Savings and Loan Crisis?
In 1934, congress created S&L’s to promote home ownership.
In the early 1980’s, Reagan lifted the historical rate caps that were hurting profitability as rates were increasing (Volker inflation).
Reagan also lifted loan restrictions, allowing commercial and consumer loans.
Some states allowed speculative real estate (Texas, where half of S&L failures came from).
As bank losses mounted from bad loans, Fed insurance allowed other bad S&L’s to stay open as their insurance funds were drying up compounding the problem.
Total losses from S&L crisis to tax payer = 150B.
How is market cap different than equity value?
Market cap = value per share * outstanding shares, equity value = assets - liabilities. In terms of valuation, market cap is going to be more accurate, but equity value (book value) is a look at fundamental valuation without the fluctuations of the stock market.
Allianz
German Industry: Financial Services, Insurance Market Cap: 80BN PE: 12x Income: 15B EBIT, 7B Net CEO: Oliver Bate
Allianz X uses proceeds from insurance businesses to invest in venture projects related to the core business.
Diff between retail, corporate, investment banking.
Retail =individuals and small businesses deposits, lending
Corporate = Med to large businesses deposits and lending
Investment = Capital raise (debt/equity) and strategic MnA advisory
