Week 13 Reading Reflection

The biggest surprise in the reading for me was the underlying issue of Emotional Bias. I did not know that Entrepreneurs face the bias of believing that their venture has more value than outsiders believe.

One part of the reading that was confusing to me was Adjusted Tangible Book Value. It was confusing when the book stated, “it is important to adjust certain assets in order to assess true economic worth”. Another part of the reading that was confusing was control factor. I know the owner of a firm can affect its valuation but the books states that in some cases the owner’ interest is less than 100%. This was confusing to me because I thought that generally, owners are massively involved in the company’s they start up.

The first question I would ask the author would be how often do Entrepreneurs not perform a complete due diligence? The second question I would ask the author would be which valuations tend to be the most accurate?

I disagree when the author said that entrepreneurs tend to put more value on their venture then outsiders believe its worth. I think entrepreneurs are well aware where they stand in the market and are more familiar with their company than a few “outsiders”.