• Tuesday

  Nov 1, 2022

  • A company CAN clawback equity in a termination event (or other conditions they specify in the shareholder agreement).
  • Jcriss and Petty real estate: https://www.omegabusinessinvestments.com/
  • EDGAR = Electronic Data Gathering, Analysis, and Retrieval system. You can search for all SEC filings.
    • Example: All SpaceX filings in the last 5 years: https://www.sec.gov/edgar/search/#/ciks=0001181412&entityName=SPACE%2520EXPLORATION%2520TECHNOLOGIES%2520CORP%2520(CIK%25200001181412) 
  • Created a forge account.
    • You can see valuations on there too, eg https://client.forgeglobal.com/issuers/instacart 
  • Cool generator for company names: https://namelix.com/. Can enter keywords and other preferences.
  • Concept reminders.
    • Advance rate.
      • Same as LTV.
    • Clawback.
      • Returning assets to the employer on termination, usually. Mostly cash, but you can forfeit bonuses or stock equity as well. Usually requires termination with cause.
    • LRR.
      • Liquidity Reserve Requirement. Typically how much banks must keep in reserve for to cover liabilities. 10% of accounts, usually.
    • IRR.
      • Internal Rate of Return. Just a metric for how good of an investment something is. Takes into account NPV (Net Present Value), the sum of all cash inflows minus the sum of all cash outflows, basically profit.
    • Margin Loan.
      • Borrowing against your holdings. Same as what you see on brokerages. Asset-backed loan, but with securities.
    • CDS.
      • Credit Default Swap. A lender lends to a borrower. The lender assumes risk with this, of course, if the borrow doesn’t pay and defaults. So a third party enters, the “investor”. They assess the risk and create a CDS, priced at what they underwrote the risk for. The investor then sells the CDS to the lender. This offsets the risk the lender assumed by providing the loan. It’s a hedge. If the borrower defaults, the investor pays the lender. Kinda like insurance for a loan, for the lender.
    • Loss Severity.
      • Just the value of a loss.
      • Often used to compare the “loss severity” to the “covered amount” in insurance claims. The loss severity is the total damage, and the covered amount is how much the policy pays you. The difference is what you cover out of pocket.
      • In lending, the loss severity is the amount of principal+interest remaining unpaid when a borrower defaults. Related: UPB = Unpaid Principal Balance. Called LSR (loss severity rate) or LGD (loss given default). The complete is 1-LSR, which is called the recovery rate; the amount of the loan that the lender actually received before default.