(Part 3) Best corporate finance books according to redditors

Articles from reputable sources are a decent source of knowledge, but some quality business books will get you an infinitely better understanding of concepts. Here is my personal business book list if you want to get a "universal generalist" understanding of business:

• Business Creation - The Lean Start-up
  
• Value Creation - How to Make Millions With Your Ideas
  
• Marketing - Getting Everything You Can Out Of Everything You Got / All Marketers Are Liars
  
• Sales - Pitch Anything
  
• Value Delivery - Indispensable
  
• Accounting/Finances - Financial Intelligence / Accounting Made Simple
  
• Understanding the Human Mind - Making Sense of Behavior
  
• Productivity - Getting Things Done
  
• Problem Solving - The 80/20 Principle
  
• Decision Making - Smart Choices: A Practical Guide to Making Better Decisions
  
• Negotiation - 3-D Negotiation
  
• Management - Growing Great Employees
  
• Project Management - Making Things Happen
  
• Statistics - Marketing Metrics
  
• Corporate Knowledge - The Effective Executive
  
• Corporate Strategy - Purpose: The Starting Point of Great Companies
  
• Creativity - The Creative Habit
  
• Personal Finance - Your Money or Your Life
  
  I am graduating with a Bachelor of Commerce Honors degree in May and I can easily say that one of these books (average price ~25$) has significantly more content than most individual classes I have taken (~600$). However, keep in mind that business knowledge and business acumen are two entirely different things. Knowledge is easily obtainable through books like these, and acumen is the result of applied experience with decision making. In short, it is one thing to be book smart, but it is another to get out there and actually apply it. No one can give you that in the form of an article or book - you have to do that yourself.
  
  edit: added links to amazon

Say no more, fam.

You don't need a degree to run a business. Having your own business allows you to experiment with these books first hand instead of taking some professor's word for it. Professor's usually just read what the book says. If they were actually good at running a business they'd probably be doing that.

• Business Creation - The Lean Start-up
  
  
  
• Value Creation - How to Make Millions With Your Ideas
  
  
  
• Marketing - Getting Everything You Can Out Of Everything You Got / All Marketers Are Liars
  
  
  
• Sales - Pitch Anything
  
  
  
• Value Delivery - Indispensable
  
  
  
• Accounting/Finances - Financial Intelligence / Accounting Made Simple
  
• Understanding the Human Mind - Making Sense of Behavior
  
  
  
• Productivity - Getting Things Done
  
  
  
• Problem Solving - The 80/20 Principle
  
  
  
• Decision Making - Smart Choices: A Practical Guide to Making Better Decisions
  
  
  
• Negotiation - 3-D Negotiation
  
  
  
• Management - Growing Great Employees
  
  
  
• Project Management - Making Things Happen
  
  
  
• Statistics - Marketing Metrics
  
  
  
• Corporate Knowledge - The Effective Executive
  
  
  
• Corporate Strategy - Purpose: The Starting Point of Great Companies
  
  
  
• Creativity - The Creative Habit
  
  
  
• Personal Finance - Your Money or Your Life

This might help.
EDIT:
This might also help:
sub·sid·i·ar·y
səbˈsidēˌerē/

noun
noun: subsidiary; plural noun: subsidiaries
1.
a company controlled by a holding company.

https://www.amazon.com/Valuation-Measuring-Managing-Companies-Finance/dp/111887370X/ref=pd_cp_14_1?_encoding=UTF8&psc=1&refRID=78812C9EYCT5SWFMY51W

i'm assuming this? link if any other readers are interested.
thanks!

Found this free course scheduled to be held over 4 weeks later this year. The accompanying textbook: "Corporate Finance" by Ivo Welch, is available online(free). Reviews for the earlier edition of the book indicating it is promising for a novice.

I think this might turn out to be a decent course for someone who hasnt understood concepts like CAPM.

I was inspired by this, but can't make salad dressing. And White Man's Burden is breadpig required reading ;)

https://www.amazon.com/Managing-Numbers-Commonsense-Understanding-Financials/dp/0738202568/ref=nodl_

Here’s the link. I’m not affiliated with the author in any way. It’s just one of the first books I read about business and takes a no-nonsense easy to read approach.

What Works on Wall Street: The Classic Guide to the Best-Performing Investment Strategies of All Time by James O'Shaughnessy

Shaughnessy manages over $6B but he simplifies his philosophy in this book, and makes it suitable for beginners. Here, he takes an empirical approach to investing strategies by backtesting each over a huge database of the major markets running over 100 years. If you want an introduction to the strategies that have worked over time, and want to see the proof/make some calculations yourself (which you may as an engineer) this is a great book. There's so many good books listed here already, but for practical advice and as an introduction, this has to be my all-time favourite.

i'm not quite a CFO but i do work in tech / at a startup / in finance. i can give a quick list of stuff I'd recommend to someone making the jump:

• Kind of a no brainer (and judging from your analysis on #1, this probably won't be an issue) but you should be familiar with the VC/ funding/legal side of things. You can be the most valuable person in the room if you like slicing through a term sheet. i'd recommend Brad Feld's Venture Deals to get your feet wet. From a more macro/ company building level, Bussgangs Mastering the VC Game is a nice, light read.
  
  
• Again, probably why they're hiring you, but strong financial modeling skills are important. Being able to do the historical accounting/ cash analysis and then quickly turn that into a forecast grounded in some business logic is essential. You're going to be making shit up sometimes, but I think everyone is to some degree in early stage tech.
  
  
• I'm not sure the size of this company, but it's probably small and you'll probably end up dealing with/managing a lot of unsexy stuff. Running payroll, administering benefits, getting a 401k set up is all very painful but part of building yourself into a real company that can hire top notch talent. of course you can hire some/most of this stuff out, but it will probably be your problem at the end of day.
  
  
• again, not sure what kind of team you're leading, but dealing with the accounting side. judging on the 2 year timeline, you'll probably be due for your first Audit and have to lead a few 409a valuations. deal with taxes/whatever else comes up.
  
  i think great CFOs for early stage can run the finance side but also kick in with the Ops stuff and have a good handle on product. You're more of the grease, and your job is to keep things humming and get out of the way to let people build.

check out Corporate Finance by Ivo Welch if you're willing to build fundamentals from the ground up. WAY cheaper if you buy direct instead of a 3rd party
http://book.ivo-welch.info/ed3/

http://www.amazon.com/Corporate-Finance-Ivo-Welch/dp/0984004955

You're kidding me? How have you managed to raise a fund if you can't open a bank account? That said, this book covers some of the back office stuff for VCs: http://www.amazon.com/Venture-Capital-Private-Financing-Entrepreneurship/dp/0470591439/ref=pd_bxgy_b_img_y

Here are three books that I've read within the past year that I loved:

​

Rand Fishkin's Lost and Founder

April Dunford's Obviously Awesome

Verne Harnish's Scaling Up

​

Of the three, only Dunford's book is marketing specific but they all offer such excellent insights that you need to think about marketing as an element of a company, not a stand-alone function. Fishkin is the founder of SEO firm Moz, and his book is a page-turner.

​

Good luck!

Valuation: Measuring and Managing the Value of Companies

There is a "for Dummies" book that I found a while back that helped.

Here are some youtube links as well if you want to ingest just enough to get familiar.

https://www.youtube.com/watch?v=r-WwXMi09JU

https://www.youtube.com/watch?v=DHZKQGzPFy8

This is a great book written by some Mckinsey guys.

http://www.amazon.co.uk/Valuation-Measuring-Managing-Companies-University/dp/0470424702/ref=pd_cp_b_0

This is very good if you are into valuation:

https://www.amazon.com/Investment-Valuation-Techniques-Determining-University/dp/1118130731/ref=sr_1_1?ie=UTF8&qid=1541756197&sr=8-1&keywords=Aswath+Damodaran

Learning to fill in one of these spreadsheets is pretty meaningless. There are so many adjustments to make in a DCF depending on each company and/or industry you should try to start from the bottom up. If you're a beginner and really want to learn how to do a full DCF I'd recommend getting one of the below books to start learning from scratch.

http://www.amazon.co.uk/Valuation-Measuring-Managing-Companies-Finance/dp/0470424656

or

http://www.amazon.co.uk/Investment-Valuation-Techniques-Determining-Finance/dp/1118130731

It's in this book (I borrowed it from the library and don't have it on hand):

http://www.amazon.com/Portable-MBA-Entrepreneurship/dp/0470481315/ref=sr_1_1?ie=UTF8&s=books&qid=1265683415&sr=8-1

The book is on entrepreneurship and they were referring to real entrepreneurs.

In general, startup founders in areas such as biotech, telecommunications (optical, wireless, infrastructure) and any field where an advanced degree is required tend to be older -- are you familiar with trends in any of these areas?

I can provide many examples of this but I provided two in my earlier post that almost everyone is familiar with.

EDIT: Here's a more pertinent link: http://www.cra.org/wp/index.php?p=152

"After surveying 500 engineering and technology companies established between 1995 and 2005, the authors found that the median age of U.S.-born tech founders was 39 (with twice as many aged over 50 as were younger than 25) and that 92% of them held at least a bachelor’s degree."

This short, terrific book tells the tale:
In Pursuit of the Common Good: Twenty-Five Years of Improving the World, One Bottle of Salad Dressing at a Time.
It was co-written by A.E. Hotchner, Paul's best friend and co-founder of Newman's Own. Hotchner was also pal with Ernest Hemingway. Needless to say, he is a hell of a writer. I highly recommend it. There is a lot of humor and when they write about opening the Hole in the Wall camps, it's very moving and inspiring. It's a memorable portrait of Paul, too. Great book.

Firstly, you are right to be paranoid. DO NOT enlist the services of a financial advisor. Their performance almost never justifies their fees in the long run. Also beware of high expense ratio mutual funds. Below are two good options. One requires some study (but perhaps less than you may fear). The second is very easy and hands-off.

Option 1: Sit in cash and learn about investing, then invest intelligently. *see details below

Option 2: If you don't want to take a bit of time to learn how to invest, open a brokerage account (Fidelity and Vanguard are both good). Put 80% of the money in a low expense-ratio S&P ETF (such as IVV or SPY) and 20% in a low expense-ratio short-term bond ETF (BSV). The S&P ETF will simply perform as the overall US economy does over the long term. The bond ETF acts as a sort of 'ballast' for the equities (S&P / stock market) portion of your investment. As opposed to long-term bond funds/ETFs, short-term bonds are less interest-rate sensitive. This will do better than most mutual funds long term. https://www.youtube.com/watch?v=mOS4wAsBnvM

With either option, you should be contributing to an IRA to the maximum allowed amount every year. Whether you use the money yourself or give it away, you will pay less taxes.

*Resources for learning to invest wisely (the much better option!):

https://www.ruleoneinvesting.com/podcast/

https://www.amazon.com/Essays-Warren-Buffett-Lessons-Corporate/dp/1611637589/ref=pd_sim_14_4?_encoding=UTF8&pd_rd_i=1611637589&pd_rd_r=49H5XWEBE322MGN21T9A&pd_rd_w=4BiWA&pd_rd_wg=h8HSo&psc=1&refRID=49H5XWEBE322MGN21T9A

https://www.amazon.com/Dhandho-Investor-Low-Risk-Method-Returns/dp/047004389X/ref=sr_1_1?ie=UTF8&qid=1524885124&sr=8-1&keywords=the+dhandho+investor

https://www.amazon.com/Intelligent-Investor-Definitive-Investing-Essentials/dp/0060555661/ref=sr_1_1?ie=UTF8&qid=1524885145&sr=8-1&keywords=the+intelligent+investor+by+benjamin+graham

First off, I completely agree with DarthSaver's comments.

Given that you like to read and that you have a business owner mentality, I would recommend that you read the two books below. These books are more focused on "active" investing (owning individual stocks instead of passively investing in a basket of stocks through an index fund). If you would prefer not to manage your investments, then quite frankly there isn't much for you to learn. Just use passive index funds.

https://www.amazon.com/Essays-Warren-Buffett-Lessons-Corporate/dp/1611637589/ref=sr_1_3?ie=UTF8&qid=1520640630&sr=8-3&keywords=buffett&dpID=51vwjJJLwqL&preST=_SY344_BO1,204,203,200_QL70_&dpSrc=srch

https://www.amazon.com/Common-Stocks-Uncommon-Profits-Writings/dp/0471445509/ref=pd_sim_14_4?_encoding=UTF8&pd_rd_i=0471445509&pd_rd_r=K4WPS6M0ED7AJT7BZ8D3&pd_rd_w=ScNGz&pd_rd_wg=mtfRg&psc=1&refRID=K4WPS6M0ED7AJT7BZ8D3

That's my value investing theme song from now on! Whenever the bad news makes me afraid I'll sing it to calm myself.

I don't put much stock in forward earnings estimates, though, after reading books like What Works On Wall Street and Quantitative Value. How are they on other value metrics, like EBID/EV?

Venture Deals is great and I'd also strongly recommend Mastering the VC Game by Jeff Bussgang. It's a really easy read and brings a lot of clarity to the subject of equity financing.

Amazon link

Fantastic book that will cover everything in regards to the structure, salaries, etc.

http://www.amazon.com/gp/product/0470591439/ref=pd_lpo_sbs_dp_ss_3?pf_rd_p=1944687522&pf_rd_s=lpo-top-stripe-1&pf_rd_t=201&pf_rd_i=0470650915&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=1YA313T6PHQEYVRCH3G3

I encourage you to read page by page. It's an awesome resource.

Now beyond that, the hardest part of starting a VC is obviously raising the capital or "raising the fund". Because a VC firm is really just a culmination of separate "funds". I would assume that you would be interested in seed stage investments since you dont sound too sophisticated, so you would raise a few million. This is where your network and resume comes through. Unless you know people in high places, you NEED to have experience as a startup founder, VC experience, consulting or investment banking. Minimum. If not, I'd suggest reading the book and spending a few years entering into these fields.

"It's beyond me how anything I've said implies that is my thinking."
"A P/E ratio does imply return as you said, but has no relationship to growth." Maybe I'm misunderstanding you but it sounded like you use P/E as a proxy to earnings yield without thinking about what a "fair multiple" is.
https://www.scribd.com/doc/79983013/UBS-Valuation-Multiples-Primer#from_embed

"You may want to check their financials - they're currently at 39.8% and i has steadily risen over the last 3 years"
I understand that, and what I was saying was that if you just run the numbers using their "price increases" and approximate average sale price per SKU, you'd see that the delta on gross margins over the past few years can't possibly be due to them increasing prices on the same SKUs because the delta is too low.

"What I heard was the SSSG was 2.5% not the 5% the street was anticipating"
Yes, and the entire point I was trying to make is that you need to understand what the stock price is implying, which is a big mistake that a lot of investors make (retail or institutional). Maybe I haven't communicated this well, but if you read this book (linked below), you'd see exactly what I meant.
https://www.amazon.ca/Value-Four-Cornerstones-Corporate-Finance/dp/0470424605

"Time will tell who is right."
Just keep in mind that using the stock price to verify your decision making process is essentially not separating type I vs type II error. The stock can work without the thesis being right.

I'll leave it at this; you decide how to take it.

This book is a good resource, pick it up from your local library and give it a read. I think I finished it over a weekend? It's not super difficult.

Hi!
Do you have the test bank for Financial Management: Theory & Practice 15th Edition by Eugene F. Brigham (Author), Michael C. Ehrhardt (Author) ISBN-13: 978-1305632295
ISBN-10: 130563229X

Amazon Link: https://www.amazon.com/Financial-Management-Practice-Eugene-Brigham/dp/130563229X/ref=sr_1_sc_1?ie=UTF8&qid=1495337529&sr=8-1-spell&keywords=Financial+Management+Theory+and+Practive

Thank you!

https://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalist/dp/1119594820/ref=dp_ob_title_bk

Is probably the standard intro text.

There are several "phases." It varies from company to company but generally looks like the following:

1. Friends&Fools ~ just enough to keep going (super early stage)
   
2. Angel investors* ~$10k-200k (proof of concept, possibly a few rounds)
   
3. Series A ~2m-10m (enough to become a real company or die trying)
   
4. Series B ~20m-50m (not ready for exit** stage, but growing quickly)
   
5. C/D/E/F... ~50m+ (large valuations up to billions, how attractive can you make the exit before you run out of money)
   
   You want each round of funding to be at a higher valuation than the last, that way each previous investor can claim a better and better balance sheet and the company gets increasingly large injections of cash to fuel growth (you get your next round of investors on growth).
   
   If subsequent rounds are valued less than before, previous investors (and founders) get screwed and lose a lot of control + ownership. But at that point it is usually preferable to getting no money and going out of business (most startups have large burn rates and not a good monetization strategy).
   
   Each round founders and previous investors give up some control of the company to new investors. So early investors usually have the right of first refusal. They can continue to invest in each round and keep their control for additional money.
   
   I cannot stress how hype driven this is. When a company seems great, everyone wants in. If a company seems to be struggling, it becomes hard to raise money very quickly).
   
   This is why you see successful startup CEOs are often natural hype machines. Its a necessary survival skill. Technical and personal skills are somewhat less so
   
   ​
   
   *Could also be known as seed phase
   
   ** Exit means buyout by larger company, like Google. Or an IPO on the stock market. This is where investors make back money, in theory
   
   More info: https://www.investopedia.com/articles/personal-finance/102015/series-b-c-funding-what-it-all-means-and-how-it-works.asp
   
   If you really want a good guide book, I would suggest this one: https://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalist/dp/1119594820/ref=sr_1_2?keywords=venture+deals&qid=1571807378&sr=8-2
   
   Not particularly useful if you are just casually curious, but if you want the nuts and bolts on how the process works, its a good one.

Valuation: Measuring and Managing the Value of Companies (Wiley Finance) is a well-regarded, but aproachable book that covers a wide spectrum of what you'll learn in your finance degree.

Or...honestly...don't read anything. You'll get plenty of finance knowledge along the way.

I have the Personal MBA and while I haven't read it in it's entirety, I will say I never plan to because the few chapters I've read I've found lacking in depth. Seeing as this is posted in r/entrepeneur, I would recommend The Portable MBA in Entrepreneurship (link: https://www.amazon.com/gp/product/0470481315/)

You have done everything nicely. Before going to planner or other web sites, just read these two used books which will help you.

https://www.amazon.com/gp/product/141330835X (first few chapters)

https://www.amazon.com/gp/product/0804137366 (chapter 1 enough)

These two saves you lot of time instead of going here and there in web.

I'm in the middle of reading this book now. Take a look.

​

https://www.amazon.com/Managing-Numbers-Commonsense-Understanding-Financials/dp/0738202568

It seems you are interested in public policy more than the mechanics of finance and accounting. It's also worth noting that when arguing a point people tend to dismiss the views of someone who must resort to petty insults, so if you are ever having a real discussion with someone about this it would be wise to avoid doing so.

Those losses were not insignificant compared to their overall profitability. Remember, this is done on an annual basis. If they made $100 billion last year but lost $1 million this year they would not owe income taxes this year, barring any deferred taxes due. They quite literally lost more money than they made in certain areas of operation; the government does not tax anybody on losses and allows them to be carried forward or backward for a certain amount of time. This is as true for Grandma's Bakery down the street as it is for a multi national corporation.

After looking at their recent annual reports the vast majority of their tax credits and lower rates come from foreign operations. So I suppose you will be glad to know that other countries incentivize research and development of cleaner energy technology much more than the US does. In fact, in 2009 (the year they had an effective negative tax rate of 11.5%) the total breaks from the US only lowered their rate from 35% to 30.5%. The rest was due to a combination of foreign credits and lower foreign statutory rates.

And no, we did not end up paying them anything. That's not how negative effective tax rates work, at all. If you are actually interested in this, and not just spouting emotional hatred for evil corporations, I highly suggest reading through Financial Modeling and Valuation: A Practical Guide to Investment Banking and Private Equity. It will give you great tools to separate what's really going on from media fluff pieces, and you will have an excellent base of knowledge to actually debate the (in)effectiveness of corporate tax credits. Anyways, a negative effective tax rate simply means that the taxes they actually paid to the IRS were less than the total taxes they report in their financial statements. This is due to differences in accounting for depreciation, carried losses, credits, and deferring taxes until a later year. GE has significant deferred taxes that get paid in pieces each year, and will all be paid.

Furthermore, according to the lobbying group Citizens for Tax Justice, which fights to close loopholes and increase statutory rates, the total amount of tax subsidies enjoyed by the 288 most profitable companies over the last five years was $362 billion, or an average of $72.5 billion per year. The federal government took in $2.8 trillion in taxes in 2013. In other words, if all those tax subsidies had actually been collected it would have represented a grand total of a 2.58% increase in tax revenue for the government. This isn't exactly a significant amount.

And for what it's worth, my personal opinion is that I would rather see tax incentives for things like developing cleaner technologies than giving that money to a government that spends a full 25% of its revenue on national defense but only 1% on education. There are absolutely loopholes that should be closed, such as what some tech companies are doing by incorporating in Ireland and leasing their intellectual property to their US "subsidiary", effectively avoiding US taxes for nothing. However, this does not mean that every time it is reported that a company had zero or negative taxes in the US that there is some shady conspiracy going on designed to line the pockets of Mr. Scrooge CEO.

📅 2018-04-23 ⏰ 15:25:19 (UTC)

>I'm doing an AMA on Reddit tomorrow for the launch of https://www.amazon.com/Lost-Founder-Painfully-Honest-Startup/dp/0735213321. Hope to see lots of you there, asking tough Qs 😅

>— Rand Fishkin ✅ (@randfish)

>🔁️ 17 💟 111



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Workers are paid in accordance to the scarcity of their particular kind of labor. Burger flippers and uber drivers will always be paid low because they don't require prerequisite analytical or managerial skills. They are entry level jobs.

Capitalists are not "hoarding" profits in safe vaults for shits and giggles. The profits are either (1) reinvested back into the company by expansion, new R&D, or hiring or (2) are paid to the owners of the company as a dividend.

I think an elementary course in corporate finance should be required for all high school students. The basic "supply and demand" economics courses are not enough, as we can see in our discourse.

https://www.youtube.com/watch?v=WEDIj9JBTC8