The Following Are Specific Course Learning Outcomes

The Following Are Specific Course Learning Outcomes Associated With Th

The following are specific course learning outcomes associated with this assignment: • Evaluate the qualities of effective corporate governance. Guarantee • Use technology and information resources to research issues in advanced financial management. • Write clearly and concisely about advanced financial management using proper writing mechanics.

Introduction: • The past two modules have been a bit of a mash-up of different ideas and tools, which makes it difficult to ask you to perform a neat, simple task that covers all the material that we covered. Instead, we’re going to ask you to synthesize the bigger concepts from past lectures. We’re going to do so using a company that most everyone is familiar with: Facebook. • Facebook, as everyone pretty much knows now, rocketed to popularity starting in 2005 and hasn’t looked back since. As you might expect from a highly successful, capital-intensive, hightech operation that’s growing at blazing speeds, the company has gone through several rounds of financing to finance business growth. We’re going to ask you to look at that financing and explain to us what happened. • Though a savvy researcher could find these transactions herself via Google if she truly wanted to, we’ve gone ahead and pulled the big ones up for you in chronological order to save you some time. We encourage you to investigate each of these further, however. There’s no shortage of background on each of these. Here they are in nice news-bite capsules for digestion:

• The Facebook group announced that it has raised between $10 million to $12 million in first-round financing led by Accel Partners on April 15, 2005. As a part of the transaction, Jim Beyers, a Managing Partner at Accel Partners, joined the company's board. The post-money valuation of the company was $100 million.
• Facebook, Inc. announced that it has raised $27.5 million in its third round of funding led by new investor Greylock Partners on April 19, 2006. New investor MeriTech Capital Partners and existing investor Accel Partners invested in the transaction. The post-money valuation of the company was $525 million.
• Facebook, Inc. announced that it will raise $240 million in an equity round of funding from new investor Microsoft Corporation on October 24, 2007. As a result of the transaction, Microsoft Corporation will now hold 1.60% stake in the company. The round was raised at a post-money valuation of $15,000 million.
• Facebook, Inc. announced that it has raised $200 million in funding from Digital Sky Technologies Limited on May 26, 2009. Digital Sky Technologies Limited invested in preferred stock and acquired 1.96% stake, valuing the company at $10 billion.

So what really happened here? What were the major events surrounding and shaping these investments? We want you to tell us the story of the business as it unfolded through these massive transactions. • In order to successfully complete this assignment, you’ll have to rely on your powers to navigate the world-wide web and your ability to work backwards a bit. The information is out there if you know how to look. Remember that until recently, this was a private company, so we can’t easily verify estimates on these financial numbers. So, be sure to justify your thinking with plenty of evidence from similar businesses and events. Good luck! Write a minimum 4 page paper in which you do the following:

1. Briefly describe the type of financing that was being used here and why it was used for each round of funding.
2. Speculate as to what the money was used for after each successive round of financing. (Don’t forget, Facebook was raising money to finance certain projects.)
3. Provide an explanation behind the company’s bubbly corporate valuation during this time.
4. Determine how outside investors were valuing this company. (Hint: look at similar businesses.)
5. Estimate the company’s major financial numbers (revenue, net income, or other financial metrics) during each of the four rounds for financing.

Assignment 4: Assessment Tool Due Week 7 and worth 130 points Refer to the Scenario Assignments 1-6. Other Preparation: Review the following Websites: • 1. Go to Research Methods Knowledge Base Website, located at , and read “Types of Surveys.†Then, navigate to the menu bar on the left and click on “Selecting the Survey Method†to read the next article. 1. Go to Research Methods Knowledge Base Website, located at , and read “Constructing the Survey.†Then, navigate to the menu bar on the left and click on the following items and read the articles: “ Types of Questions,†“Question Content,†“Question Format,†and “ Question Wording.†1. Go to the Research Methods Knowledge Base Website, located at , to learn about using a Likert scale. 1. Review the needs of the stakeholders and the confirmation evaluation questions developed in Assignments 1 and 2. (Note: This assignment includes an expanded version of the survey but also goes deeper into demographics, interview questions, and rationale for using this type of instrument. Also, the questions should provide information that will address the needs identified in Assignments 1 and 2. And the questions should relate to the program outcomes. The questionnaire should be integrated into the paper. However, this questionnaire does not have to be administered to any participants for this assignment.) Write a five to six (5-6) page paper, along with a fully developed assessment instrument, in which you: Part 1: Background 1. Provide a thorough background of the assessment project focus by describing the following: (a) at least two (2) purposes of the assessment, (b) three (3) key characteristics of the environment, (c) three (3) key characteristics of the target audience, and (d) at least three (3) types of information the survey is designed to collect. Part 2: Method 1. Provide the following to describe the method: (a) rationale for using a questionnaire, (b) number of people in the target audience, (c) number of respondents needed for statistical significance, (d) method of distributing the questionnaire and collecting data, and (e) way of providing confidentiality to respondents. ( Note: Use the Websites listed and other academic sources to provide support for your methods.) Part 3: Questionnaire Development Section A: Directions: 1. Provide clear directions for taking and submitting the questionnaire within a specified time range. Inform the participants that the responses will be confidential and will be used in aggregate form. Section B: Demographics 1. Develop at least five (5) closed-ended questions to gather demographic information about each respondent (e.g., profession, position, number of years in profession, education, gender, other). Section C: Assessment questions 1. Develop at least fifteen (15) closed-ended questions about the program, using a Likert Scale. ( Note: In a 5-point Likert Scale, 1 is very low, 2 is low, 3 is neutral or undecided, 4 is high, and 5 is very high.) Develop at least five (5) open-ended interview questions about the program, allowing for responses as long as 100 words. Part 4: Costs, Challenges, and Benefits 1. Discuss the costs, challenges, and benefits of this type of data collection. Part 5: Summary 1. Summarize at least three (3) lessons you learned by developing the brief survey and extended questionnaire for your evaluation project. 1. Provide at least three (3) reliable, relevant, peer-reviewed references, (no more than one used previously) published within the last five (5) years that support the paper’s claims regarding questionnaire development methods, costs, challenges, and benefits.

Paper For Above instruction

The rapid evolution of Facebook’s financing history offers a compelling case study of startup funding strategies, valuation dynamics, and the role of outside investment in fueling technological innovation and company growth. This paper aims to analyze the various types of financing employed during Facebook's early funding rounds, hypothesize the utilization of raised funds, explain the factors contributing to the company's inflated valuation, examine how external investors valued the company by benchmarking against similar firms, and estimate key financial metrics across funding stages.

Types of Financing and Rationale Behind Each Round

Facebook’s initial funding was through venture capital (VC) investments, which are equity-based and typically used to support early-stage growth and product development. The first-round financing in April 2005, led by Accel Partners, exemplified this approach, where Facebook secured approximately $10-12 million at a post-money valuation of $100 million. Venture capitalists infuse capital during early phases due to the high potential for rapid growth, despite substantial risks and limited operational history. Facebook's subsequent funding rounds—bolstered by other VC firms and strategic investors like Microsoft—continued to capitalize on this model, emphasizing equity investments to support expansion, talent acquisition, and platform infrastructure.

Speculating Fund Usage After Each Funding Round

Following the first-round investment, Facebook likely utilized the capital to enhance its technological infrastructure, expand user acquisition initiatives, and develop core features. The $27.5 million raised in 2006 would have supported aggressive marketing efforts, platform scalability, and international expansion, given the rapid growth in user base. By 2007, the large infusion of $240 million from Microsoft coincided with efforts to monetize the platform, improve advertising capacity, and expand into mobile technologies. The 2009 funding from Digital Sky Technologies, valued at $10 billion, probably financed global scaling, pioneering targeted advertising algorithms, and strategic acquisitions to supplement Facebook's expanding ecosystem.

Exploring the Elevated Corporate Valuation

Facebook’s soaring valuation reflects multiple factors: investor speculation on platform dominance, network effects, and anticipated profitability from advertising revenues. The valuation surpasses typical startup metrics, driven by the platform’s rapid user growth and data monetization potential. During these funding rounds, the valuation was often based on similar technology companies like Google and MySpace, along with projections of future revenue streams. Market sentiment, media hype, and Facebook’s strategic positioning contributed to inflated valuations, sometimes detached from actual financial performance, which is characteristic of tech bubbles.

Valuation Approaches by External Investors

Investors valued Facebook primarily through comparables and discounted cash flow (DCF) methods. The comparables approach involved analyzing valuation multiples of similar internet companies such as Google and MySpace. For instance, the 2007 valuation at $15 billion coincided with Google's revenue model and user base growth metrics. The DCF approach, although less transparent given Facebook’s early-stage profitability challenges, projected future cash flows from advertising revenue and user engagement metrics. Both methods underscored the importance investors placed on platform growth prospects and data assets over current profitability.

Estimating Financial Metrics at Each Funding Stage

Given the private nature of Facebook during early funding periods, financial estimates rely on industry proxies, user base growth, and comparable startups. During 2005, Facebook’s revenue was minimal, primarily from advertising on a small user base. By 2006, with user numbers expanding rapidly, revenue might have reached between $1-5 million, driven mainly by advertising. The 2007 infusion would coincide with revenues of roughly $30-50 million, as monetization efforts intensified. By 2009, revenues likely exceeded $500 million annually, as targeted advertising and data monetization became central to Facebook’s business model. Net income remained modest in these early years but was trending upward as advertising efficiency improved.

In conclusion, Facebook’s early funding rounds highlight a strategic use of venture capital to sustain rapid growth, despite developing profitability, with valuations driven by growth potential and strategic positioning. Investors employed various valuation techniques grounded in industry comparisons and future revenue projections, underscoring the company’s trajectory from a promising startup to a global technology leader.

References

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