Week 2 Columbia University GSAS BIOT 4180

Brief review Sources of information – PWC – E&Y – BIO – Government sites: CIA, IRS Columbia University GSAS BIOT 4180

3-6 word description examples On-off switches for genes Outsourced cheap whole genome sequencing Stem cell picks and shovels Audience specific – Less toxic targeted chemotherapy – Chemo-antibody conjugates Columbia University GSAS BIOT 4180

Elevator Pitches Columbia University GSAS BIOT 4180

One minute pitch Hook: relevant question in need of a solution 3-5 word description Target customer Target customer’s specific problem Your solution Why you are different Economic teaser Columbia University GSAS BIOT 4180 Adapted from MARSDD.com

The Early Business Idea Identity Entity: the need to choose a business platform – Single proprietor – Partnership – Corporation Columbia University GSAS BIOT 4180

The basis for determining your business form is to limit your personal liability, establish a platform to bring in partners (ie raise money) and to avoid double taxation Columbia University GSAS BIOT 4180

Sole Proprietorship No division between the founder and the business Tax pass through No limits to liability Upfront legal costs Columbia University GSAS BIOT 4180

Partnership No division between the partners on one side and the business on the other Tax pass through No limits to liability Upfront legal costs Columbia University GSAS BIOT 4180

Professional Corporation (PC) Attorneys, architects, engineers, accountants, doctors Members still have liability for their actions but not for those of their partners (somewhat simplified) The corporation pays taxes Columbia University GSAS BIOT 4180

Limited Liability Company (LLC) Hybrid between partnership and corporation Not incorporated Limited liability Tax pass-through Columbia University GSAS BIOT 4180

Corporation (C Corp) Limited liability Double taxation Oversight and administrative requirements Columbia University GSAS BIOT 4180

S Corporation Limited liability Tax pass through Maximum number of investors Corporations cannot invest in S Corps Columbia University GSAS BIOT 4180

Early Accounting Concept of double entry – Cash in or out or receivable or payable – Asset gained or sold Match the income or revenue for a period of time with the use of materials to create that revenue – Depreciation – Amortization Three financial statements Columbia University GSAS BIOT 4180

Financial Statements Balance sheet: point in time summary of what is owned, what is owed and what is left over for the owners Income statement: revenue generated over a period of time matched against the expenses needed to generate the revenue Cash flow statement: reconciliation between revenue / expenses and change in cash balances Columbia University GSAS BIOT 4180

Principle of Finance Time value of money: a given sum in the future is worth less than the same sum today Risk and uncertainty decrease the value of a sum in the future There is a methodology for calculating the present value of a future sum Concept of discounted cash flow Columbia University GSAS BIOT 4180

Capital Structure of a Company Debt – Borrowed funds – Fixed repayment – No share in upside or success of company – Preference in liquidation of assets Equity – Ownership stake – Different levels: preferred versus common – Variably liquid Hybrids: Convertible debt, convertible preferred Columbia University GSAS BIOT 4180

Assignment Homework assignment will be ed to you. Columbia University GSAS BIOT 4180