What is the Company Legal Opinion? As part of the funding process (particularly the due diligence process), investors will require that the attorney for the startup venture deliver a legal opinion concerning certain organization and governance requirements. This opinion letter allows for counsel to make certifications regarding aspects that may or m...

What is Execution as Learning? The execution as learning model, proposed by Amy C. Edmondson, argues today’s central managerial challenge is to "Inspire and enable knowledge workers to solve, day in and day out, problems that cannot be anticipated".   How is the Execution as Learning Model Used? The Execution as Learning approach aims to radically c...

What is a Relative Valuation Model? A type of business valuation method that analyzes the value of a company to the value of its competitors or industry peers in order to determine the financial worth of such a company is termed the Relative Valuation Model. It makes use of multiples, averages, ratios, and benchmarks to determine a company's worth. ...

What is a Franchise Disclosure Document? A Franchise Disclosure Document (FDD) is a type of legal document which must be presented to individuals in the United States who are prospective buyers of franchises in the pre-sale disclosure process. It is a document that contains information that is essential to potential franchisees who are about to make...

What is Abandonment Value? An abandonment value refers to the cash value earned on a project after it has been abandoned or discontinued. A project or an asset can be abandoned (liquidated or sold) if its net present value of expected cash flow is lower than the amount received for salvage. Hence, the value of the asset after it has been sold or liq...

What is an Unlevered Free Cash Flow? Unlevered free cash flow (UFCF) refers to the money available to a company without interest payments. It is the cash flow of a company based on the belief that the company owes no debt therefore has no interest payments to make. When filing the financial statement of a company, UFCF are also reported. This is the...

What is Revenue Based Financing? Revenue based financing is a special type of fundraising for startup businesses from investors or VCs. Also referred to as royalty-based financing, investors in this system of financing usually get back their capital from shares of the gross earnings of the enterprise. Simply put, investors or VC's, whichever is the ...

What is the Earnings Capitalization Model? The earnings capitalization model values the company based upon the company earnings. To determine normalized earnings, you calculate a weighted average of earnings over a period of years. The earnings reported on financial statements or tax returns are normalized through several steps. These modifications ...

What is the Abnormal Earnings Valuation Model? The abnormal earnings valuation model is also called the residual income model. This is an accounting model used in evaluating the financial status of a company. This valuation model determines the equity value that a company owns based on the company's earnings and its book value. When evaluating the f...

What Defenses Exist to Strict Product Liability Actions? The following defenses affect liability in a strict product liability case. Contributory and Comparative Negligence  Assumption of the Risk Misuse of a Product  When is Contributory and Comparative Negligence a defense in Strict Product Liability Actions? These are generally not defenses to st...