Reading Reflection Week 13

1) What was the biggest surprise for you in the reading? In other words, what did you read that stood out the most as different from your expectations?

The biggest surprise for me in the reading was the existence of an emotional bias found in sellers of companies. It was something that I did not expect to show up on a text so based on formal terms to account for such a “real life” phenomenon.

2) Identify at least one part of the reading that was confusing to you.

One part of the reading that was confusing to me was confusing to me was the difference between letters of intent and term sheets. The main reason behind it was the wording of one being binding yet, non-binding while the other was completely arbitrary to both parties. Another cause of confusion is if some provisions are simply temporary until the final agreement or are in place for the rest of the partnership.

3) If you were able to ask two questions to the author, what would you ask? Why?

Two questions I would ask the author would be: Why did you switch from a primarily academic content to one that incorporated real-world applications like the aforementioned idea of emotional bias? The stark difference between the two schools of thought was made with so little transition that it left me without an answer to what could have caused it.

My second question is; If you were a CEO of a company with a high valuation and little substance, would you reduce the valuation or keep as is to ride the stock wave, knowing it might cripple your company? Facebook in the chapter had a high valuation but, was overhyped and suffered for a couple months trying to get itself off the ground in the stock market. Would be better to start off low and then rocket up to maintain a higher level to avoid this.

4) Was there anything you think the author was wrong about? Where do you disagree with what she or he said? How?

I don’t think the author was wrong about anything this chapter as all the content was correct and informative. Yet, there was a bit of an issue with some of the explanations though, this problem was a minor hindrance.