Phases of Dutch East India Company's Century Long Operations

Answer using professional finance knowledge and term and be very critical. 1) The Dutch East India Company's century long operations can be broken into four phases.

The first phase would cover their origins and competition with the Portuguese. The second phase would cover their near monopoly on regional trade and successful defense and growth of their business. The third phase would cover their eventual defeat to the British East India Company and the collapse of the Dutch East India Company. The fourth phase would be their lasting impact on equity markets today.

a. Why was the company founded? What was their comparative advantage in the first phase?

b. How did they maintain a successful business with such high profits for so long?

c. What was the British East India Company's competitive advantage in the third phase? Why did the Dutch East India Company collapse?

d. What is the lasting impact of the Dutch East India Company on equity markets

today?

2) You founded "GottaHave!", a tech hardware consumer products company (smart glasses) five months ago. You are working an entry-level job in the finance team at a medium-sized tech company that pays you $80,000.00 a year and allows you to work remotely 3 days a week. Your overhead (rent, utilities, bills, loans, food, etc.) is $3,500.00 a month.

You estimate that you will pay 24% in taxes. You plan to put the rest of your income into the company. You have negative net worth (net debt) and no assets to borrow against.

You have developed a prototype at a cost of $25,000.00 of your own money plus $10,000.00 from a friend. You gave up 1% equity for the $10,000.00 last month. You estimate that you will need $150,000.00 to start production at scale, market, and carry the company through the next 6 months. You hope that it will take 3 months to set up the manufacturing and logistics but are doubling the time just in case there are delays. You expect turnaround times, from order to delivery, to be 2-3 weeks once everything is set up. The orders will go directly to the manufacturer, who will handle shipping from Thailand. You can add $15 of gross profit per item by ordering $5,000,000 of product in bulk. You expect to sell direct to consumer through your website and through stores on third-party sites (Amazon, eBay, Walmart, etc.) and plan to start marketing preorders 3 weeks before production begins. You are estimating gross profits of $15 per item from your website and $5 per item from your stores on third-party sites. You expect fixed costs to be $250,000.00 a year after the first sales, mostly in salaries. You believe the total addressable market to be around 10% of the population in developed countries and around 1% of the population in developing countries.

a. How would you launch the product? Why?

b. How do you plan to finance the first year? Why?

c. How and where would you market? Why?

d. At what point would you quit your "day job" and go full time? Why?

3) You are a partner at LSVC, a late-stage venture capital fund. A friend of yours at ESVC, an early-stage fund, has been raving about "GottaHave!" for months. ESVC led the $10,000,000.00 series A round for 25% of the company two years ago. She has invited you to lead the latest round. They are offering 10% equity for $50,000,000.00, of which ESVC and other early investors will contribute 20%. "GottaHave!" makes smart glasses that connect to devices and allow users to see and communicate in virtual meetings without having to look at a phone or computer screen. The company has been growing rapidly and is in talks with major corporations for purchase agreements. Although none have materialized yet, they have two letters of intent conditioned on scaling production.

You tried the "GottaHave!" glasses and found them useful but a little clunky, you have been using them for all your virtual meetings over the last month and believe there is real potential in the company. Some friends at major investment banks advised that the company would need four large corporate clients to have a successful IPO. The company needs a large infusion of cash now to scale production for corporate clients before large competitors jump into the market. After talking with your partners, you decide to invest.

You heard a rumor that THC, a large tech hardware company, was willing to offer between $400-$500 mil to acquire "GottaHave!" but have not been able to verify this.

Your internal analysis and channel checks give a 45% chance of acquisition by a large tech firm (Microsoft, Cisco, Dell, Google, etc.), 30% chance of successful IPO, 20% chance of needing to raise additional capital, and 5% chance of failure.

a. What type of structure and terms would you ask for? Why?

b. Would you try to bring in other late-stage funds, or do the $40 mil alone? Why?

c. What are your concerns for your investment? How do you hedge these?

4) You are the CEO of "GottaHave!", a maker of smart glasses that connect to devices and allow users to see and communicate in virtual meetings without having to look at a phone or computer screen. The company has been growing rapidly and you are contemplating an IPO early next year. You plan to raise $500 million at around a $2 billion valuation.

After a bake-off, you have narrowed the field to 4 banks that you are considering to lead the IPO. You are also considering having 2 of them joint-lead the IPO. Bank I is a bulge-bracket that has the best retail distribution and the most individual advisors, but their equity research is not considered great in your space. They don't have as many deep relationships with institutional investors but you're sure they have enough to get the deal done as they have done others. Their lead banker understood the product after you walked him through it but was not a true believer. Bank 2 is also a bulge bracket, but their retail distribution is sub-par. They have great relationships with institutional investors and decent equity research in your space. Their lead banker is very sharp but aloof, you always feel as if she's talking down to you. Bank 3 is another bulge bracket with the best regarded equity analyst in your space. Their retail distribution and relationships with institutional investors is in between the other two. Their lead banker understood the product and went on about how great it was, but you got the impression that he bought it on the way to the meeting and only used it for about 5 minutes. Bank 4 is a boutique that has only led smaller IPO's in the past, although they have been in a junior position on larger deals (co-manager, underwriter, etc.). They have no in-house retail distribution but work with a large syndicate of small firms around the world. They have relationships with most institutional investors, but not at the highest levels. Their equity research is well regarded in your space but might not be as widely distributed due to their size. Their lead banker has been using your product since the beta came out and seemed to know as much about "GottaHave!" as you do.

a. What are the pros and cons of Bank I?

b. What are the pros and cons of Bank 2?

c. What are the pros and cons of Bank 3?

d. What are the pros and cons of Bank 4?

e. Which would you choose to lead your IPO? Solo or joint led?