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• In 2009, Adam Neumann and a business partner established the first WeWork space in New York's Little Italy.

• WeWork provided shared office space for businesses, offering rental options as short as a day.

• By 2019, WeWork's operations spanned over 111 cities in 29 countries.

• WeWork's revenues reached approximately $3 billion by 2019, despite ongoing financial losses.

• In early 2019, SoftBank, a tech investor, valued WeWork at $47 billion with a major investment.

• WeWork's initial plan to go public with an IPO was withdrawn in mid-2019.

• In late 2019, Softbank's agreement to invest further was cancelled in 2020.

• The COVID-19 pandemic challenged WeWork's business model centered on shared, face-to-face meeting spaces

Introduction to Finance

• Finance includes understanding corporate organization, goals, and control, which are applicable to businesses of all sizes
• Corporate finance and financial management involves two central issues, including the role of corporate finance and the financial manager, as well as the goal of financial management.
• Also includes corporate organization, conflicts within a business, and financial markets in the United States.

Finance: The Five Main Areas

• Financial topics grouped into corporate finance, investments, financial institutions, international finance, and fintech.

Corporate Finance

• Corporate finance is a central subject.

Investments

• Investments involve stocks and bonds, addressing questions about asset prices, risks, and asset allocation
• Investment careers include financial advisors who advise customers on investments.

Portfolio Management

• Portfolio management involves managing money for investors, often through mutual funds managed by portfolio managers

Security analysis

• Security analysis involves researching individual investments to determine if the price is right
• Analyst determines the price by looking at company and industry reports
• Financial advisors and portfolio managers rely on security analysts for information
• Investment-related areas are financially rewarding, but demanding and competitive

Financial Institutions

• Examples of financial institutions are banks and insurance companies
• Banks employ commercial loan officers to assess businesses' financial positions for loan eligibility
• Insurance companies employ analysts to determine risk suitability and premium amounts

International Finance

• International finance focuses on global aspects of corporate finance, investments, and financial institutions, including topics like exchange rates and political risks.

Fintech

• Fintech combines technology and finance.
• Fintech companies use the internet, mobile phones, software, and/or cloud services to provide a financial service.

Marketing and Finance

• Finance is needed in fields such as marketing for budgets, expenditure analysis, and project evaluation.
• Financial analysts work with marketing to assess project profitability, where sales projections are a key input.

Accounting and Finance

• Finance understanding is required for accountants, especially in smaller businesses, to make financial decisions
• Finance also assists accountants in recognizing valuable information and how it's used.

Management and Finance

• Those in management need to understand how their jobs affect profitability, improve profitability including the characteristics of activities that create value

Technology and Finance

• Finance is a STEM discipline, especially at the graduate level, so science, technology, engineering, and math are important too

Banking Fintech

• Fintech companies are quickly competing with traditional banks in the banking sector
• Fintech offers mobile payments for the user with companies like Venmo and PayPal
• In 2019, over $1 trillion was transferred by mobile payment companies

Crowdfunding fintech platforms

• Crowdfunding platforms such as Kickstarter and GoFundMe enable direct fundraising from individuals. such as for buying products before they come to market, while GoFundMe is used to raise money for a cause.
• Fintech companies assist companies in raising capital from places like Kabbage, Lendio, and Accion
• Fintech platforms such as Upstart and Prosper facilitate direct lending to consumers by letting customers apply for loans
• Fintech marketplaces now allows loans to be funded based off other factors

Blockchain and Cryptocurrency

• Blockchain is at the heart of many new fintech service
• Cryptocurrency is a digital asset like currency, Bitcoin, which was released in 2009. Since then, there are more than +4,000 variations

Insurtech

• Insurtech allows customers to research, compare, and purchase insurance online, example are Lemonade, Oscar Health, to Trōv

Robo-Advising

• Robo-advisors use robo-advisors that provide investment advice based on mathematical rules or algorithms. This means there is minimal human interaction.
• Stock trading apps like Robinhood and Acorns allow investors to invest in stocks with no commission

Budgeting Apps

• Finance includes using budgeting apps right on a consumer's mobile phone
• Finance helps to examine and understand financial issues and allows people to make financial decisions

Corporate Finance Definition

• Corporate Finance involves answering 3 questions when starting a business
• What and how should long term investments be funded?
• Where should long-term funding come from, either from other owners or borrowed money?
• How you will handle everyday financial activities like dealing with customers and suppliers.

The Financial Manager

• They answer the there questions related to corporate finance.
• The financial manager's function is associated with the vice president of finance or the chief financial officer (CFO).
• The vice president of finance coordinates the activities of the treasurer and the controller.
• The controller's office handles cost and financial accounting
• The treasurer's office manages the firm's cash, credit, financial planning, and capital expenditures.

Financial Management Decisions

• Financial managers deal with the amount of cash expected, as well as the time and likelihood of receiving it.
• Financial managers also needs to support long-term investments, known as capital structure

Capital Budgeting

• In capital budgeting, try to find investing opportunities that are worth more to the firm than they cost.

Capital Structure

• Capital Structure is the mixture of long-term debt and equity the firm uses to finance its operations
• Financial manager must focus on how much the firm should borrow and the cheapest sources of funds

Working Capital Management

• Working Capital refers to a firm's short-term assets and its short-term liabilities, such as inventory and money owed to suppliers

Forms of Business Organization

• The 3 forms of business organization we should understand
• Sole Proprietorship
• Partnership
• Corporation
• As a firm grows, the advantages of the corporate form increases

Sole Proprietorship

• A Business Owned by one person, is the simplest type of business, and therefore least regulated
• All profits are claimed solely by the owner.
• The bad news is that the owner has unlimited liability and is taxed as personal income.

Partnership

• Similar to sole proprietorship, but contains two or more partners
• General Partnership- partners share gains or losses and all have unlimited liability for all partnership debts
• Limited partnership- one of more of the partners run the business and have unlimited liability, while there will be one or more limited partners who will not actively participate in business.
• Partnerships based on a relatively informal agreement are easy to form

Corporation

• Corporations are a legal “person, separate and distinct from its owners
• Starting a corporation requires preparing articles of incorporations
• Stockholders elect the board of directors
• Management runs the corporation's affairs in the stockholders' interests.

Corporate Raising Cash Advantage

• Limited liability for debts and unlimited life, which allows for raising cash through the sale new shares of stock
• The number of owners can be huge, and the ownership continously change
• Limited Liability Company (LLC)- operates and it taxed like a partnership, but retains limited liability for owners.
• Goldman Sachs and Co. transitioned one of its partnerships of an LLC
• Because of their for outside investors and creditors, corporations tend to be the best option for large firms.

Benefit Corporation

• A corporation that benefits the public in terms of accountability, transparency, and purpose

Alternative Goals of Financial Management

• Goals for financial management include, profitability, stability, and avoiding risk
• The point of financial managagement is to maximize the current value per share of the stock.
• This takes precedence over ethical decisions

Sarbanes-Oxley

• The Act is better known as “SOX,” and is intended to protect investors from corporate abuses.
• One key sections of SOX took effect on took effect on November 15, 2004, related to financial reporting.

Agency Relationships

• The relationship between stockholders and management is called an agency relationship
• A possibility of conflict of interest between the principal and the agent is called the agency problem

Managerial Compensation

• This is frequently tied to financial performance in general and often to share value in particular.
• In 2019, the best-paid executive was Sundar Pichai, the CEO of Alphabet, who made about $281 million

Control of the Firm

• Control of the firm ultimately nests with controlling shareholders
• An important mechanism by which unhappy stockholders can act to replace existing management is called a proxy fight
• Firms that are poorly are more attractive as acquisitions because a greater profit potential exists
• A stakeholder is someone other than a stockholder or creditor who potentially has a claim on the cash flows of the firm.

Cash flows to and from the firm

• Firms sell shares of stock and borrowing money to raise cash from the financial market
• Firms invest the cash in current and fixed assets and those assets generate cash
• After taxes paid, some of the cash flow is reinvested in the firm, and the rest goes back to the financial markets as cash paid to creditors and shareholders
• Financial markets provide a way of bringing buyers and sellers together.

Primary and Secondary Markets

• Primary market is the original sale of securities
• Secondary markets are the ones where the securities bought and sold after the original sale
• A public offering is a way to seling securities to the general public
• Otherwise a private placement is a negotiated sale and is more direct from buyer to seller

Dealer versus Auction Markets

• There are two kinds of secondary markets, auction markets and dealer markets.
• Generally speaking, dealers buy and sell for themselves, at their own risk.
• Dealer markets in stocks and long-term debt are called over-the-counter (OTC) markets.

NYSE market listing and trading process rules

• Equity shares trade in organized auction markets such as the New York Stock Exchange (NYSE).
• Stocks that trade on an organized of exchange are said to be listed on that exchange/ Firms must follow listing requirements to be listed on that exchange.