Name: Basiano, Ryn Andrew P.

SN: 20171120255

Questions:

1. What is the difference between an acquisition and a merger?

The main distinction between mergers and acquisitions is that a merger involves
the merging of two organizations into a single new entity, whereas an acquisition
occurs when one firm absorbs another without creating a new one.

A merger, for example, is when two corporations agree to unite and form a new
legal organization. An acquisition, on the other hand, is when one firm buys out
another and integrates it into itself without changing its own identity.

2. What is the most important element in valuing a technology venture? Explain.

I think the most important elements is taking the first step into the market and the
first step will be getting the Total Addressable Market (TAM) provides an
indicator of the potential size of the business in the future and is something that
we look at in detail when we invest in startups. We always look for bottom-up
sizing, rather than top-down because it provides a much more realistic and
measurable indicator of size. An example of a top-down analysis is, the size of
food and beverage spend in MENA is $10bn and if I can capture 2% of that
market, my business can reach $200m in sales. As you can see, it’s very
subjective and macro in nature, without going into the actual market that one can
sell to. An example of a bottom-up analysis is, if I am selling real estate listings to
brokers and there are a total of 10,000 real estate brokers in my market, of which
1,000 real estate brokers are sellable, where I can charge them $1000/month,
then my addressable market is $12m (here is a link that gives a more detailed
description). Clearer and measurable in description and provides a realistic
estimate of what your business can generate “if all goes to plan”.

Once you’ve identified the total addressable market and therefore the potential
size of the business, you are on your way to building the foundation of your
valuation.
3. Explain why the selection of an investment bank to be the lead underwriter is an
important decision for a technology entrepreneur.

Because risks are assessed and evaluated by underwriters. They are frequently
employed in the insurance and mortgage industries, as well as the debt and
equity markets. Underwriters also assist firms in their desire to go public, or when
they go through the initial public offering (IPO) procedure. They accomplish this
by assisting firms in preparing for their initial public offering and acting as a
liaison between the company and potential investors.

When the offering is far too enormous to handle, some organizations may require
more than one underwriter. The lead underwriter, often known as the primary
underwriter, assembles a team of underwriters. An underwriter syndicate is a
temporary group of people that work together to assist bring business offers to
market.

The lead underwriter is responsible for a variety of tasks, including preparing and
filing a prospectus with the Securities and Exchange Commission (SEC).
Following the filing of the paperwork, the main underwriter can begin the
preliminary stages leading up to the actual offering. This involves creating
roadshows, which allow the company's key executives to give presentations to
the public about the company and its imminent offering.

4. Why does an acquiring firm want to understand the position in the product life
cycle of the products and services in the target venture’s portfolio? Explain.

All products go through the different life cycle stages of introduction, growth,
maturity and decline. A product life cycle may last for a few days or continue for
years. Companies need to determine the life cycle stage to set performance
goals, such as sales and profit growth targets, and make resource allocation
decisions, such as strategic and human resource planning.