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ARE YOU FINANCIALLY LITERATE? CHAPTERS 12-14
5. You’ve heard people refer to an LLC as a business entity. What does that mean? _ ____________________________________________________________________ 6. You finally convince the formalities-phobic NTENS innovators to toe the corporate line and follow the rules set out in the bylaws. Now you have another problem: board meetings ! They are verbal free-for-alls with people arguing, yelling, talking out of turn and going off on bizarre topics that no one is prepared to discuss. What rules of debate and discussion can you impose to make board meetings more orderly and productive? Tell 3 ways the rules will help. _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ 7. The NTENS product line is killing it! Revenue is over $10 million this year. The company wants to expand to form its own film production company to make sports-related action movies featuring their products. The board directs you to search for seed money for this costly and ambitious project. It that appropriate? _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ 8. NTENS scores a meeting with a high profile venture capital fund. Your pitch deck is flawless. The venture capitalists think this could be a lucrative business opportunity for them and they agree to fund the venture in exchange for 30% equity interest . What is that? _ ____________________________________________________________________ _ ____________________________________________________________________ 9. NTENS’ fusion of film and sports equipment is successful. The venture capitalists are now activating their exit strategy . What is that? When was this “strategy” devised? _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ Impose parliamentary procedure aka Robert’s Rules of Order. The rules will help to define an agenda, enable everyone to be heard, provide leadership at meetings, full discussion of issues and a record of the decision-making process. Limited Liability Company A 30% ownership interest represented by shares in the corporation . Seed money refers to just a small amount to get a fledgling startup on its feet. This company should seek venture capital or private equity to help fund its new venture/product. It is the plan put in place as part of the venture capital agreement before funding. It lays out how they will recoup their investment which is how they will convert their equity to cash . PRODUCT PREVIEW
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279 THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY
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