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Bose founder makes big stock donation to MIT

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Re: Bose founder makes big stock donation to MIT

#31

Post by Anechoic »

crazycanuck wrote: post #20
Anechoic wrote: post #13

Earlier quoted context omitted.

They say that have sales of $2 billion http://articles.boston.com/2010-12-26/business/29285848_1_no... Assuming a decent P/E ratio, total stock value is probably in the 10s of $billions minimum (I know, as a private company things are different, I'm just thinking off the top of my head).

But the E in P/E is earnings not sales, so this estimate is way too high. Better guess: start with 1x sales and adjust up or down based on how fast it's growing and how profitable you think they are. As far as public/private, if you haircut public company multiples by 10-15% you wouldn't be too far off.

Oops, yup you're correct. Every outside analysis seems to indicate that they're incredibly profitable (there retail products have pretty dramatic markups) so the earnings gotta be in the $100s of millions at minimum.

Re: Bose founder makes big stock donation to MIT

#33

Post by sachinag »

smackfu wrote: post #12
smackfu wrote: post #2

He should have donated 30% to MIT and 70% to a good marketing school.

(Also, it's pretty ironic that I know that MIT is a good tech school but have no idea what a good marketing school is.)

Kellogg (Northwestern) and Ross (Michigan) are pretty widely acknowledged as the best traditional marketing schools. General list: http://www.businessweek.com/bschools/mbapremium/oct2006/bs20...

Re: Bose founder makes big stock donation to MIT

#34

Post by tt »

Dr. Bose strongly believes that the company would have gone down a terrible path had they taken on any VC money. He had always wanted Bose Corp to focus on research, and thus all profits are poured into funding more R&D. No doubt this decision makes it possible for him to donate the majority of shares to MIT today. I still remember his words: "Those MBAs would have had me fired in no time."

So how did he fund the company initially? According to Dr. Bose, Lee handed over his entire life savings because he firmly believed that Bose would succeed!

Re: Bose founder makes big stock donation to MIT

#36

Post by yalogin »

joshfinnie wrote: post #14

A bit of a sensational title. With all the discussion on Hacker News lately about ownership of the company, this is interesting. Gave a majority of non-voting stock to MIT to get company dividends. That is all. Interesting way of donating your fortune to a school.

Well, he is still running the company and want to have control over the decision making process. MIT still owns the majority shares right?

Re: Bose founder makes big stock donation to MIT

#37

Post by SwellJoe »

robg wrote: post #5

According to the definitions often used here, isn't Bose a lifestyle company?

It seems to me that "lifestyle company" is often a denigrating term used by VCs to insult companies that didn't need VCs to succeed, and that didn't choose an exit that would fit a VC-invested business model. Bose is a very large, very successful, international company. Most VCs would have been very pleased to have been involved in funding Bose. Bose could also go public at any time, and have a very large exit.

Regardless of the lack of an exit, the Bose founders are extremely rich today, and they don't have to remain involved in Bose for it to continue to operate and grow. I believe the original use of the term "lifestyle" implied an ongoing requirement for the founders to be involved to keep the company going, but it's come to mean "a company that did not raise huge sums of money and did not choose to exit via acquisition or IPO within a few years of founding".

In short, I don't like the term, as it provides little useful information about a company, and is colored by the most common users of the term (VCs).

Re: Bose founder makes big stock donation to MIT

#38

Post by [deleted] »

tt wrote: post #34

Dr. Bose strongly believes that the company would have gone down a terrible path had they taken on any VC money. He had always wanted Bose Corp to focus on research, and thus all profits are poured into funding more R&D. No doubt this decision makes it possible for him to donate the majority of shares to MIT today. I still remember his words: "Those MBAs would have had me fired in no time." So how did he fund the com…

[deleted]

Re: Bose founder makes big stock donation to MIT

#39

Post by Encosia »

rubergly wrote: post #35

I don't understand anything about the stock market, but giving someone a large portion of stock with the agreement that it can never be sold seems like the wrong thing to do when people need to spend more to bring us out of a recession.

Bose stock pays dividends to its shareholders. The stock doesn't need to be sold for MIT to receive (and spend) money derived from the stock.

Re: Bose founder makes big stock donation to MIT

#40

Post by SwellJoe »

robg wrote: post #32
_pius wrote: post #23

Earlier quoted context omitted.

No.

Who were his large investors?

It was initially funded, at least partially, through research grants, I believe.

But, shouldn't you have instead said, "Wasn't Bose a bootstrapped company?" if you were talking about how the company was funded?

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