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More About This Title Advising Entrepreneurs: Dynamic Strategies for Financial Growth
English
Marc Lane (Chicago, IL) is a business and tax attorney. He is a Master Registered Financial Planner, Registered Financial Consultant, and Certified Investment Specialist. He has authored thirty books, is an Adjunct Professor of Business at the University of Illinois College of Business Administration's Institute for Entrepreneurial Studies, and an Adjunct Professor of Law at Northwestern University.
English
English
Preface xiii
Part One The Financial Advisor’s Role 1
CHAPTER 1 The Regulatory and Ethical Environment 3
Duties of a Fiduciary 4
Initial Interview 6
Compensation Approaches 7
Engagement Letter 9
Conflicts of Interest 10
CHAPTER 2 Financial Management and Planning 13
Pre-Start Analysis 14
Entrepreneur as Manager 16
Evaluating the Enterprise 19
Eventual Harvest 24
Part Two Shaping the Venture’s Financial Structure 27
CHAPTER 3 Using the Tools of the Accountant 29
Break-Even Analysis 29
Forecasting Models 31
Analyzing Financial Statements 32
Managing Cash 37
Managing Receivables 41
Managing Inventory 43
Managing Liabilities 44
Managing Capital Assets 46
CHAPTER 4 Entity Design Choices 49
Tax Considerations 50
Sole Proprietorship 51
Partnership 52
Corporation 56
Limited Liability Company 64
CHAPTER 5 Private Placements 69
Federal Exemptions 70
Private Placement Memorandum 74
CHAPTER 6 Venture Capital 77
Venture Capital Marketplace 78
Business Plan 79
The Venture Capitalist’s Valuation Process 80
Venture Capital Agreement 82
Employment Agreement 83
Shareholders’ Agreement 84
CHAPTER 7 Bank Loans and Debt Alternatives 87
Characteristics of Debt 87
Sources of Debt Financing 88
Creditworthiness 90
Types of Loans 91
Leasing 92
Working Capital Funding 92
Selecting a Banker 95
Negotiating a Bank Loan 97
CHAPTER 8 Government Funding 101
Federal, State, and Local Funding Sources 102
Small Business Administration 104
Other Federal Opportunities 108
CHAPTER 9 Joint Ventures and Strategic Alliances 111
Alliance Strategies 112
Licensing 114
Identifying a Strategic Partner 115
Working toward a Strategic Alliance Agreement 116
Part Three Protecting the Entrepreneur and His or Her Assets 123
CHAPTER 10 Risk Management 125
Organizational and Operational Considerations 125
Developing a Risk Management Agenda 127
Insurance Principles 127
Insurance Strategy 129
Property Insurance 131
Liability Insurance 133
Insurance Benefits for Employees 135
Self-Insurance 137
Director and Officer Liability 139
Indemnity 142
CHAPTER 11 Valuing the Entrepreneurial Venture 145
Evaluation Methods 146
Valuing Assets 148
Valuing Liabilities 156
Determining the Purchase Price 158
CHAPTER 12 Buy-Sell Designs 167
Buy-Sell Agreement 168
Triggering Events 168
Funding the Buyout 169
Stock Redemption or Entity Agreement 170
Avoiding Dividend Treatment 171
Stock Attribution Rules 174
Redemptions to Pay Death Taxes 176
Alternative Minimum Tax 177
Accumulated Earnings Tax 178
Split-Dollar Redemption 180
Disadvantages of Redemption 180
Cross-Purchase Agreement 181
Trusteed Cross-Purchase 182
Partnership Cross-Purchase 184
Split-Dollar Cross-Purchase 185
Wait-and-See Buy-Sell Agreement 188
Employee Stock Ownership Plan 189
Estate Tax Deferrals 191
Premium Allocation 192
Valuation 192
Transfers for Value 195
Combining the Life Insurance Retirement Plan and the Buy-Sell 198
S Corporation Buy-Sell Issues 199
CHAPTER 13 Asset Protection Strategies 201
Ethical Obligations 201
Exempt Assets 203
Gifting Strategies 204
Choice-of-Entity Implications 205
Part Four Compensation Planning for the Entrepreneur and His or Her Employees 211
CHAPTER 14 Cash and Deferred Compensation 213
Bonuses and Deferred Compensation 214
Constructive Dividends 215
Company Retirement Plans 217
ERISA Compliance 222
ERISA for Deferred-Compensation Plans 235
ERISA for Split-Dollar and Executive Bonus Plans 242
Related Issues: Age and Sex Discrimination 247
CHAPTER 15 Equity-Based Compensation 251
Stock Options 252
Incentive Stock Options 252
Nonqualified Stock Options 254
Restricted Stock 258
Phantom Stock Plans and Stock Appreciation Rights 259
Part Five Managing Capital Events 261
CHAPTER 16 Buying or Selling an Entrepreneurial Business 263
The Client’s Objectives 263
Financial Information 266
Guidelines for Reviewing Standard Accounting Opinion 268
Contracts and Continuing Obligations 271
Leases and Properties 273
Federal Taxes 276
State and Local Taxes 278
Internet Domain Names, Patents, Trademarks, Trade Names, and Copyrights 280
Permits, Licenses, and Franchises 281
Liens, Judgments, and Deeds 281
Employee Benefit Plans 282
Unemployment Compensation Rating 282
Stock Certificates, Options, and Records 283
CHAPTER 17 Succession Planning 289
Federal Tax Rules 290
Tax-Deferral Opportunities 291
Valuation Strategies 292
Income-Shifting Techniques 293
CHAPTER 18 Initial Public Offering 303
Public Life 303
Preconditions 305
Registration Team 306
Registration Process 307
Nontraditional Alternatives 310
Index 313
