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Preface | |
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Introduction | |
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Importance of Knowing the Numbers | |
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Measuring Success | |
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What Is Entrepreneurial Financial Management? | |
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What Makes Entrepreneurial Finance Similar to Traditional Finance? | |
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What Makes Entrepreneurial Finance Different from Traditional Finance? | |
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Lack of Historical Data and Liquidity Complicate the Practice of Finance in Early Stage Firms | |
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Using Stakeholder Analysis to Guide Ethical Decision Making | |
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Summary | |
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Building a Financial Forecast | |
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Setting Financial Goals | |
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Wealth vs. Income | |
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Integrating Non-Financial Goals | |
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Importance of Self-Assessment | |
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The Self-Assessment Process | |
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The Business Plan | |
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Summary | |
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Individual Entrepreneurial Self-Assessment | |
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Partnership/Shareholder Assessment | |
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Understanding Financial Statements | |
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The Accounting Equation | |
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An Example | |
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Basic Financial Statements | |
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Limitations of Business Financial Statements | |
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Summary | |
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Revenue Forecasting | |
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Common Forecasting Mistakes | |
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The Link Between the Marketing Plan and Revenue Forecasts | |
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Creating Scenarios | |
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The Link Between the Revenue Forecast and the Cash Flow Forecast | |
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The Impact of Business Type on Revenues | |
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Quantitative Forecasting Techniques | |
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Importance of Revenue Forecasting | |
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Summary | |
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Expense Forecasting | |
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Defining Costs | |
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Cost Behavior | |
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Breakeven Analysis | |
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Expense Forecasting: The Impact of Business Type on Expenses | |
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Reducing Expenses Through Bootstrapping | |
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Summary | |
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Integrated Financial Model | |
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The Entrepreneur's Aspirations Reconsidered | |
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Contribution Formal Income Statement | |
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Earnings Before Interest and Taxes (EBIT) | |
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Inventory of Assumptions | |
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Social Ventures | |
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Determining the Amount of Funds Needed | |
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Using the Forecasting Template to Determine the Amount of Funds Needed | |
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Time Out of Cash | |
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Assessment of Risk Sensitivity | |
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Integrating into Business Plan or Funding Document | |
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Summary | |
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Integrated Financial Statements Template Instructions | |
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Managing the Financial Resources of a Venture | |
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Monitoring Financial Performance | |
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Tracking Assumptions | |
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Establishing Milestones | |
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Getting the Numbers Needed to Manage | |
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Using Numbers to Manage | |
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Working with Accountants | |
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Summary | |
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Day-to-Day Cash Flow Management and Forecasting | |
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Why Is Cash Flow Different From Net Income? | |
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How Is Cash Flow Measured? | |
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Interpreting a Statement of Cash Flows | |
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Statement of Cash Flows: Indirect Method | |
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Investors and Creditors Use of the Cash Flow Statement | |
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Effective Cash Management | |
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The Emotional Side of Cash Flow Management | |
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Summary | |
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Sources of Financing | |
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Financing over the Life of a Venture | |
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Common Misconceptions about Entrepreneurial Financing | |
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The Diverse Nature of Business Financing | |
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Financing Smaller Businesses with Modest Growth Potential | |
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Financing High Growth, High Potential Ventures | |
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Summary | |
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Start-up Financing from the Entrepreneur, Friends, and Family | |
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Self-Financing | |
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Advantages and Disadvantages of Self-Financing | |
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Friends and Family Financing | |
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Structure of Funds Invested | |
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Summary | |
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Bootstrapping | |
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Why Bootstrap? | |
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Bootstrapping Administrative Overhead | |
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Bootstrapping Employee Expenses | |
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Bootstrapping Operating Expenses | |
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Bootstrap Marketing | |
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The Ethics of Bootstrapping | |
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Summary | |
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External Sources of Funds: Equity | |
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Angel Investors | |
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Strategic Partners | |
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Private Placement | |
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SBIC | |
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The Downside of Equity Financing | |
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Working with Outside Investors | |
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Summary | |
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External Sources of Funds: Debt | |
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Short-Term Debt | |
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Long-Term Debt | |
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Forms of Debt Overlooked by Entrepreneurs | |
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Government Funding Through SBA | |
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Working with Bankers | |
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The Downside of Debt | |
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Developing a Financing Plan | |
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Summary | |
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Financing the High Growth Business | |
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What Venture Capitalists and Private Equity Funds Provide: The Four "Cs" | |
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Integrating Profitability into the Business Plan | |
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Stages of the Firm | |
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Stages of Business Funding | |
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The Dark Side of Venture Capital Financing | |
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Initial Contact with a Venture Capitalist | |
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Initial Public Offering (IPO) | |
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The Process of the IPO | |
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Summary | |
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Planning for the Entrepreneur's Transition | |
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Business Valuation | |
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General Concepts that Guide the Determination of Value | |
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Basic Information Required for a Valuation | |
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Discounted Cash Flow | |
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Market Comparison Techniques and Their Drawbacks | |
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Summary of Market Comparison Approach | |
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Exit Planning | |
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Self-Assessment Revisited | |
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The Ethical Side of the Entrepreneur's Transition | |
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A Model of Exit Planning | |
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Exit Options | |
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The Process of Selling a Business | |
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Post-Exit Issues | |
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Summary | |
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Index | |
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About the Authors | |