3
Introduction
During the summer before my senior year, I had the opportunity to work as a research
analyst in the finance department of TuaTeam, a financial and strategic consulting firm in
Valencia, Spain. TuaTeam is a relatively new firm that serves its clients in a wide range of areas,
from strategic restructuring and business model development to finding funding for future
projects and identifying/evaluating potential investment opportunities. TuaTeam also works
closely with communities around Spain to foster innovation and development among youth and
professionals seeking to gain experience in new trends in technology and cultural enrichment.
The company currently holds classes through a partnership with CEITúria in artificial
intelligence, innovation, and robotics.
Being able to work on a variety of projects gave me a broad understanding of the clients
and operations of their businesses. However, the most interesting work that I did went in-depth
into specific areas of our clients’ needs. My role included supporting clients in a range of
projects. At the beginning of the internship, our primary focus was on events and competitions
hosted by the European Union. I had the responsibility of learning about the clients’ needs,
completing the preliminary research on the events and their cultural significance, and presenting
to the TuaTeam leadership or clients on how to execute their plans. Towards the end of the
internship, I worked on a handful of other research projects for TuaTeam and our clients,
including identifying AI applications to increase workplace efficiency, evaluating the competitive
landscape, and developing guides and models for alternative investment projects.
Professional Development Objectives
My primary objective in terms of my professional development was to hone my research
skills. Regardless of the specific career that I chose after graduating, in assessing and executing
investment decisions, it is crucial to be able to efficiently find relevant information and evaluate
data and sources to draw conclusions. I also hoped to develop my analytical and presentation
skills through this experience.
Personal Development Objectives
This experience was the longest amount of time that I had lived on my own as well as my
first time being in a foreign country. As such, I anticipated a long list of challenges that I would
face in the process of embracing the cultural differences of my new environment. I aimed to
demonstrate an increased level of cultural competence because the world of business has become
dramatically more globally focused and connected in recent years, and this trend will likely
continue. Supporting multiculturalism would involve overcoming language barriers and learning
to communicate effectively in a professional setting. I also hoped to debunk stereotypes from
both my perspective and those I interacted with early and remove my ethnocentric orientation.
Another personal goal that was important for me in a broader sense was learning to adapt to a
new environment outside of my comfort zone.
4
Weekly Reviews:
Week One Overview: May 20, 2023
During my first week, I became oriented with the company through their internship
training and information platform, TuAcademy. There were three other interns that I worked
with: two in-person interns from Italy and London and one intern working remotely from
Vancouver. Due to the significant commute from the city to the office where I was placed, I
worked remotely one or two days each week. On the first day, I met on Zoom with the CEO of
the company, Borja Sanz, to discuss my role and meet the other interns.
My first task was to research the grants offered by the European Innovation Council
(EIC). After each member completed the research on the areas that we were assigned, our team
created an informational presentation for the leadership of TuaTeam about the opportunities for
funding available through the EIC, including the EIC Pathfinder, EIC Transition, and EIC
Accelerator programs. The objective of each of these programs is to support the development of
breakthrough technologies and innovations at different stages of their development.
After completing and presenting this presentation, our team began creating a document to
serve as a format for TuaTeam’s clients who intended to apply for EIC funding. This document
contained an overview of the objectives of the funding opportunities, the requirements, and
detailed information listing each step of the application process. After preparing the necessary
application documents, we met again with the leadership team of TuaTeam and representatives
from the companies we were working with to present the overview of the application process and
discuss which funding opportunity was the best fit for each, based on which stage of
development each company’s project was in.
Week One Reflection
My introduction to TuaTeam was entirely different from what I expected in terms of the
work environment and my role in the company. Initially, efficiently communicating with my
coworkers was one of the areas I had to navigate most quickly. Among the full-time workers at
TuaTeam, only the CEO spoke English fluently and was therefore the only source of information
that the interns received regarding our tasks. Considering his position and level of responsibility
in the company, he was often very busy, so we typically only communicated with him briefly
once or twice a week to give or receive updates on our work. The other interns did not speak
enough Spanish to communicate with our supervisor, nor did I when I arrived, so we utilized
translation apps when we had questions about company resources, logins, and other specifics.
Within the team of interns, our work schedules ranged significantly based on our locations and
side projects, and we had to find time outside of normal office hours to collaborate on each task.
These barriers in communication were difficult to overcome at the beginning of the internship
when each of us was becoming acclimated to our roles. In fact, during our first presentation of
our EIC research to the leadership, we received lots of negative feedback, but after clarifying the
direction of the project, we were able to start again and present the information to the client in a
useful way.
I also learned quickly that I would not have a typical day-to-day list of assignments, and
instead, my time would be spent on whichever new project the company needed support with.
This was very exciting to me, as I quickly gained exposure to each area that we were thrown
5
into. I learned the basics of the structure and policy of the European Union from our research
about the EIC, as well as the funding opportunities that are available for for-profit businesses that
collaborate with research institutes and community-based organizations to develop products that
contribute to the future of society. At such an early stage in the internship, I had the opportunity
to meet with our clients to discuss their next-level business ideas for innovations like AI
applications for traffic management, clean energy technology, and quantum information
processing.
Week Two Overview
After jumping in headfirst into a major project, on Monday of the second week, we took a
step back to learn more about the industry we were working in and TuaTeam’s competitive
landscape. We were each assigned a city in Spain and tasked with compiling a list of competitors
that provide similar consulting, legal, or advising services for the company’s internal database.
Then, we created a spreadsheet with the contact information, description, and core competencies
of each company.
After this, we completed an 80-page informational document outlining the process for
identifying potential investment possibilities for our company as well as similar opportunities for
clients. This report also contained a detailed description of valuation methods for private
company transactions, as well as a comprehensive list of potential areas for a company to
improve to increase the value of its organization before a sale.
During the last two days of the week, we began creating a proposal for the European
Week of Regions and Cities event. TuaTeam will be participating in this event in the fall of 2023
by hosting a “side event.” This consists of a discussion/debate between a group of panelists that
is mediated by a representative from the submitting organization, in this case, the CEO of
TuaTeam. The side event discussion must address one of the themes that are provided by the
European Union for this year’s event. The themes that I researched and developed proposal
discussions for were “Regions in Post-Industrial Transition” and “Small and Mid-Size Urban
Centers Driving Growth.” After discussing as a group which topics to pursue, we compiled a list
of potential local community leaders who could participate as panelists in the discussion.
Because TuaTeam often hires interns from around the world, I also had the task of
creating a training video for the new hires to watch during their training. This video was about 5
minutes long and consisted of instructions for creating the proper company accounts and emails,
accessing and using the project management software that is used at TuaTeam (mainly Trello and
Coda), and translating the existing company training website from Spanish to English.
Week Two Reflection
During the second week, I started to feel more comfortable with my surroundings. I
started eating lunch with my coworkers outside of the internship team and talking to them about
the company and their work life. This was an important step for me in understanding the
direction that the company was moving in the future and in getting used to the cultural
differences between Spanish workplaces and those in the United States, particularly in how
employees of different tenures interacted and the work and break schedule that they followed. By
researching the differences between similar competing firms in the surrounding competencies, I
began to gain a better understanding of the nature of what TuaTeam did on a day-to-day basis.
6
This task was insightful in that it gave me a more thorough grasp of the range of capabilities of a
financial consulting firm and potential career opportunities in this field.
Moreover, I was excited to begin a project that seemed to directly relate to the investment
research career path that I was pursuing. A lot of my work at the University of Arkansas has been
tied to investment philosophy and valuation techniques, and while most of my studies have been
focused on fixed income and public equity analysis, I am particularly driven to learn more about
private equity investment. My experience networking, interviewing, and discussing the finance
industry with professionals on campus has shown me that there is a significant and increasing
draw in the wealth management field for allocation in the alternative investment class. This
project gave me my first real exposure to this area.
Our work with the European Week of Regions and Cities project was similar to our work
on the EIC funding opportunities, but the event was unique, and I had a much more hands-on
role in determining the content of the events that we would deliver. Unlike the EIC project,
where clients had a technology/process in development and we were tasked with informing them
on the requirements of the funding, during this assignment I had the chance to have input and
propose the discussion topics for the event based on research that I did into relevant issues
involving the broader community. Though I was initially disoriented by all the changes in
moving to a foreign country and working in a new field, I was glad that by the second week of
my arrival, I had the responsibility and ability to describe the company and internship program to
incoming interns.
Week Three Overview
On Monday of the third week, our proposal for the European Week of Regions and Cities
side event was approved by the management team of TuaTeam. After creating an account as
representatives of TuaTeam on the European Union website, we created a template of the side
event application and drafted an application using the information from our proposal. The next
day, our supervisor briefed us on five clients who also wanted to apply for their own side events.
The clients and their preferred topics for the side events were TuaTeam (innovation and
entrepreneurship), AUDITA (environment, agenda 2030, audits, etc.), ElKalambraso
(communication, video production, etc), UnicornsHUB (special education), ION Data Science
(Machine Learning, AI, etc.), and Asociación Rurada (non-profit EU funds, etc.). We drafted six
applications for each of these and met with the management team to explain the discussion topics
and have them approved for submission.
At the end of the week, each of us edited the documents we had created to match the style
and format of the TuaTeam website and existing client resources. The topic I chose to cover was
“How to analyze the economy and market conditions to find the optimal time to sell.” This was a
high-level view of economic analysis meant to introduce clients to key indicators and factors that
can potentially affect the success of a sale or investment in a company. My research focused on
the impacts of government policy and consumer patterns and sentiment on different industries
and gave an overview of how to analyze economic indicators and indices to identify turning
points in the business cycle. This document also included a guide to the resources that investors
can use to learn and stay up to date on market trends and their effects. I supported this research
with case studies on previous real-world mergers, company sales, and divestitures and their
implications, such as the purchase of Whole Foods in 2017 by Amazon and the sale of LinkedIn
in 2016 to Microsoft. After we completed editing our documents, we created a presentation in
7
PowerPoint to deliver an overview of the key points of our documents to the management team
of TuaTeam and discuss whether we would continue with this project or start something new.
Week Three Reflection
Though the first two weeks of my internship seemed to bounce from one project to the
next without as much connection between the assignments or follow-through involvement from
the interns as I expected, it was reassuring to see that our clients had seen our work, liked it, and
perceived that our team of interns could add value by continuing to work on the Side Events
project. The side events would be broadcast and uploaded to the European Union’s event
website. One of the more intriguing aspects of this project was a component of the application
that required finding and contacting potential panelists for each discussion, and while TuaTeam
and each participating client would host their own discussion, the majority of each seminar
consisted of influential speakers discussing problems that they saw in the community regarding
each topic and identifying potential solutions. I thoroughly enjoyed talking to community leaders
during this process about the topics that we had curated and learning from their feedback.
I was also excited to continue working on the “Wikipedia of Investments”. Our meeting with the
team went very well, and the CEO told us that he planned to use the material that we were
creating to increase the visibility of the financial consulting services of the company. The key
feedback that we received was to begin working more independently to expand the scope of the
project.
Week Four Overview
We spent the fourth week of the internship working on the expansion of the ‘Wikipedia’ of
Investment FAQs for the company website. In the morning, we met with the management team
of TuaTeam to present the three documents that we completed during Week 2, discuss the
direction of the additional content that we would create, and brainstorm six new questions to
begin researching. On Thursday, we had a new group of interns arrive, and I explained to them
the roles of the interns at TuaTeam, introductory tasks, instructions for getting set up with the
company accounts and software, and the projects that we were working on. For the remainder of
the week, we brainstormed new questions and created content for the documents. Most of my
research and documentation during this stage of the project covered various models used for
company valuation and how to approach factors that differ between the valuation of a public
company and a private company, including lack of information, control premiums, and
determining the appropriate multiples. The following is a list of the topics that our team chose to
cover, with topics 4-9 completed during this week:
1. How to find successful investment opportunities
2. How to analyze the economy and find the optimal time to sell
3. How to increase company value before sale
4. Transitioning process once a company is sold
5. How to most effectively analyze the market
6. How to analyze the value of a management team of a company
7. How to successfully evaluate the price of a company
8. How to identify and avoid potential risks to a company
9. How to understand legal complications to company mergers and sales
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Methods
to
Valuate
a
Private
Company
A
Public
vs.
Private
ae
Determining
the
value
of
a
privately-held
company
differs
significantly
from
determining
the
value
of
a
publicly-held
company
in
ways
that
often
make
the
acquisition
of
a
privately-held
valuation
relatively
more
difficult
and
expensive.
Gaining
access
to
the
necessary
information
to
evaluate
private
companies
can
be
difficult,
as
they
are
not
as
transparent
and
are
not
required
to
disclose
financial
information
regularly.
Publicly-held
companies
must
provide
quarterly
and
annual
reports,
audited
financial
statements,
management
discussion
and
analysis,
and
other
filings
with
regulatory
bodies.
Furthermore,
when
discussing
the
value
of
a
public
company,
many
people
are
often
referring
to
the
intrinsic
value,
or
the
fundamental,
objective
value
of the
company,
as
the
market
value
can
be
estimated
by
the
current
stock
price
of
the
company
multiplied
by
the
total
number
of
shares
of
equity.
Approaches
to
Valuation
Determining
the
fair
market
value
of
a
company’s
assets
can
include
many
factors,
such
as
its
capital
structure,
company
management,
and
prospects
for
future
earnings.
This
process
can
also
be
done
using
a
variety
of
methods,
as
well
as
a
combination
of
methods.
However,
the
pricing
of
a
company
is
primarily
based
on
its
profitability.
See
Annex
|!
for
detailed
methodology
on
the
construction
techniques
and
analyses
of
the
following
descriptions.
Multiples
Approach
The
multiples
approach
utilizes
financial
metrics
to
determine
the
intrinsic
value
of a
company.
1.
Earnings
Before
Interest,
Tax,
Depreciation,
and
Amortization
(EBITDA):
EBITDA
is
a
widely
used
measure
of
earnings
that
allows
potential
buyers
to
compare
the
values
of
multiple
companies.
By
adjusting
earnings
for
factors
such
as
interest
and
other
company-specific
variations,
EBITDA
provides
a
consistent
basis
for
comparison,
even
for
companies
with
different
capital
structures.
2.
Seller's
Discretionary
Earnings
(SDE):
SDE
is
often
used
when
an
individual
is
buying
a
company.
Unlike
EBITDA,
it
includes
the
wages
paid
to
the
owner.
SDE
represents
the
profits
that
can be
derived
by
a
new
owner
while
considering
the
discretionary
expenses
of
the
previous
owner.
The
value
of
a
company
is
determined
by
applying
a
multiple
to
the
chosen
measure
of
earnings
(such
as
EBITDA
or
Net
income).
The
appropriate
multiple
depends
on
factors
such
as
the
size
and
industry
of
the
company,
as
well
as
its
growth
potential,
risk
level,
and
revenue
consistency.
For
example,
companies
with
less
than
$5
million
in
revenue
typically
have
multiples
between
1.5x
and
4.0x
earnings,
while
companies
with
revenue
between
$5
million
and
$200
million
may
have
multiples
ranging
from
3.0x
to
6.0x.
Larger
companies
with
steady
revenue
and
less
risk
often
command
higher
multiples.
It's
important
to
note
that
economic
conditions
can
influence
the
value
and
multiples
applied.
DCF
Model
Similar
to
the
multiples
approach
is
the
Discounted
Cash
Flow
(DCF)
Method.
However,
rather
than
using
historical
measures
of
earnings,
a
DCF
Model
attempts
to
project
the
future
cash
flows
of
a
company.
These
cash
flows
are
then
discounted
according
to
a
reasonable
measure
of
risk
to
arrive
at
the
present
value
of
future
cash
flows.
This
is
a
versatile
valuation
method
that
allows
users
to
adjust
various
inputs
and
assumptions
to
evaluate
different
scenarios.
Depending
on
the
time
horizon
of
the
investment
or
to
account
for
the
cash
flows
beyond
the
explicit
projection
period,
it
is
common
to
incorporate
an
exit
multiple
or
terminal
value.
However,
due
to
the
need
for
detailed
assumptions
and
the
differences
in
accounting
8
Below is an excerpt from one of the documents that I worked on covering company valuation:
9
Week Four Reflection
This week, I began to have more autonomy in my role, which gave me the ability to
research areas that I had personally been interested in learning more about while simultaneously
contributing my efforts in a way that aligned with the company’s goals. Each of our teammates
became noticeably more engaged in the work that we were doing because we were given the
chance to be creative in the way that we approached this task.
We began working and communicating more efficiently with each other. The most
difficult challenge we overcame was including the remote interns who lived in different time
zones. One intern on our team was working from Vancouver, Canada, and her workday began
around the same time that ours was ending. We began meeting at 7:00 AM Spain time to stay up
to date on the work that she had completed on the investment project. Likewise, at 6:00 PM we
met again to keep her informed on any changes in the process from the office. Another challenge
that I faced was delegating this project to the new interns. In their first week, I was unsure that
they would fully understand the purpose of this project, but to increase the scope of the project in
the timeframe given by management it was necessary to include each member of the team in the
work. By the end of their first week in the office, I saw that their ideas and efforts had provided
invaluable additions to the project. Although each of us began working autonomously on the
topics we were covering, as we worked longer on the project there was a lot more collaboration
on ideas for what to cover and how to go more in-depth into each topic.
Week Five Overview
On Monday, I continued to edit the content that we had created about investment FAQs.
On Tuesday, our team met with the marketing director of TuaTeam, Carlos Aznar, and were
briefed about how the company wanted to use the content that we had created. The PDFs were to
be summarized in a blog that could be published on the company website. The criteria for this
included a 300-to-500-word limit, a reasonable level of readability, keywords included that
pertain to the topic, and a title that passed certain tests to increase the exposure that the blog and
company website would receive online (and a few others). Carlos also introduced us to the
software system that we would be using to create these blogs, WordPress. After this, we finalized
our content by standardizing the format, checking for grammatical errors, etc.
Wednesday, we familiarized ourselves with WordPress. After watching a few tutorials
about the software, we also learned about a Google Chrome extension, Keyword Surfer, that was
necessary to use to ensure that our blogs would receive an optimal level of exposure based on the
keywords that we attached to the website. We then created titles for the blogs and keywords.
During the end of the week, I learned about a digital marketing strategy often used with
blogs, in which further engagement with the company’s digital content is increased greatly by
links embedded within the content. I mapped out the most sensible progression of links
(internally to other blogs and externally to the content that we had created) that each blog would
need. Next, I showed the rest of the team this progression plan, and we began reviewing the
investment documents and choosing the content that could be best adapted for the blogs. Finally,
we wrote a summarized blog post for each document that we had created. Then, we translated
each one into Spanish and collaborated with one of the TuaTeam teammates in the office in
Estonia to translate them into Estonian as well on WordPress.
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Week Five Reflection
The shift in our project during this week was frustrating for a couple of reasons. At the
outset of our research and drafting the full-length documents, we were not aware that the format
of the final product for the company’s website would be a series of blogs and that the documents
would be used for internal purposes. The requirements for these blogs were stringent, and it was
difficult to summarize our research in such a succinct manner without excluding too many of the
main points. It also required a considerable amount of time to check that the blogs made sense
after being translated, especially in the sections that included more technical vocabulary.
However, it was reassuring that the TuaTeam marketing and management teams approved of our
work and were eager to have it published as a representation of the company.
Week Six Overview
During Week 6, we continued editing the blog posts to obtain sufficient Yoast SEO
(Search Engine Optimization) scores on WordPress. The software we used to optimize search
engine performance considered the way that search engines manage search results to provide
users with the best results. These scores were based on the criteria mentioned in Week 5 as well
as factors including paragraph length, vocabulary, and others that would improve the
performance of our content through search engines. Then, we met with Carlos and had the blogs
approved for publication on the company website. Finally, we formatted the blogs to fit the
TuaTeam website format, added suitable pictures to the blogs, and created a publication schedule
for the dates that each blog would be published. Below is an excerpt from one of the blogs that I
published titled “The Economic Environment in Business,” though unfortunately an English
version is not available:
11
Week Six Reflection
This week was mostly about finalizing our research project and completing the finishing
touches to upload the content we had created to the company website. Our focus was on
increasing the marketability of TuaTeam’s services to the public. A lot of TuaTeam’s new
business currently comes from relationships and word of mouth, however, as the company seeks
to grow its client base, the marketing team believes that website visits can provide an area of
significant growth in the company’s future operations. It was very interesting to see the
marketing techniques that companies can use to take advantage of the technology that consumers
use on a day-to-day basis. This area of the project was also new to all of us on the intern team, so
we had to ask a lot more questions throughout the process to ensure that we fully understood the
end goal. I was especially concerned about getting this part of the project right because once we
finished this, all our work would be uploaded to the company website. Each blog would serve as
a representation of the intern with their name attached to it and the reputation of TuaTeam. To
save time and avoid wasting the marketing team’s time with emails and Zoom calls throughout
the day, the four of us came together every afternoon to discuss any issues we had, determine if
we could resolve them ourselves, and if not, we compiled a list of inquiries to send to the
marketing team at the end of the day.
Week Seven Overview
The next week, we were tasked with updating a database that the company keeps of
records of the political environment in Spain. This consisted of updating lists of all of the
municipalities in eleven regions of Spain. The lists contained the voting status of each political
party, the current mayor, and contact information for the government office. We updated the lists
with the results of the most recent elections and made note of major changes in the party votes
and the changes in the mayors.
Once we completed this task, our CEO informed us that one of our larger technology-
based clients was interested in incorporating artificial intelligence into their activities and wanted
to learn more about the programs available. During the last three days of the week, we
researched AI apps that have the potential to increase productivity in the workplace. After
researching a variety of applications, we compiled a list of the twelve apps that could be most
useful to employers in our industry with descriptions of each app. Finally, we created a
presentation on an AI presentation creation program that we had used for a few of our previous
projects, Beautiful.ai. A few of the other applications we covered were TLDV (an app for
reporting, summarizing, and scripting meetings and video calls), Bardeen (used for customizing
workflows and automating tasks like data entry, email sending, etc.), and Mem (used for
managing databases of notes). We also made a separate presentation for TuaTeam on two video
and content creation software, Fliki and Surfer, as these are two programs that we believed could
be particularly beneficial to our marketing team.
Week Seven Reflection
After working long hours in the last few weeks to finish our project on time, it was nice
to have a couple of days of easier work and help other people around the office. As I mentioned
previously, TuaTeam does a lot of work for and with local government and NGOs, so the office
12
consistently maintains databases on relevant changes that occur. Updating the lists of contact
information mostly required learning a broad overview of the political parties involved in
elections and making phone calls to the offices of the municipalities when the information we
needed was not available online.
Though we didn’t receive very much information on the AI project, it is a topic that I
have been intrigued with for the last few years and was excited to dive into. I have learned about
some of the high-level areas that AI is impacting, but this was my first time learning about
specific programs and their practical applications. Furthermore, I was proud of our team for
taking the extra initiative to create a presentation for our marketing team, and after showing it to
the company, I believe the extra time that we spent paid off. For a company as young as
TuaTeam, fighting for market share in a competitive industry is key to the firm’s long-term
success. With limited resources, making efficient use of every employee’s time is crucial, and
towards the end of the summer, I saw a few of my coworkers practicing with the voiceover
feature on Fliki while making a video for the company’s social media. It was also fun to show
our supervisor how one of the programs on the client presentation worked while presenting on
that same software.
Week Eight Overview
At the beginning of Week 8, the three interns I worked with moved back to their
respective countries as the company invited three new interns into the office from Hong Kong
and North Korea. I began explaining to them the layout of the internship and getting them set up
and familiarized with the company accounts and software. We then learned how to use
Markdown language to translate government documents and bulletins. Markdown is a relatively
easy-to-use language that the company uses for creating web content, and they store many
translations in TuaTeam’s databases for formatting purposes.
Throughout the week, I also had an individual task of creating a financial model for
potential real estate investments that the TuaTeam was considering in Lisbon and Portugal. My
instructions were to create a financial model template that could be easily adjusted and filled in
with inputs from different properties that our company or clients were interested in. On Friday, I
took a brief hiatus from this to search for equipment for the company vehicles/vans, such as solar
panels for the electrical setup. We have a team that takes weekly trips to the different cities
where we have projects for meetings.
Week Eight Reflection
The new interns did not work in the finance department with me, so I worked alone on
the real estate model project. However, I was very glad to work closely with them for the
remainder of my time in Spain. Their focus was on computer science and robotics, and though I
am not familiar with robotics, I have been learning more about the applications of coding
languages in quantitative finance and I was eager to gain insight from them in the areas of our
studies that overlapped. They were quick learners, and it did not take them long to adjust to the
structure or processes of the job. However, English was their second language, and they did not
speak Spanish, so I did a lot more translating between the interns and full-time employees during
my last month.
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I was thrilled to begin working on the cash flow model and felt that this was a project that
I was both well-suited for and able to learn a lot from. I have spent a considerable amount of
time during my undergraduate working with Excel to create financial models and I thoroughly
enjoy the process of developing these models. Up to this point, all the models that I had created
were used to forecast the financial performance of publicly traded stocks, but I was confident
that I could apply these skills to forecast the potential investment performance of more tangible
assets.
Week Nine Overview
To start the real estate valuation project, I began using any online resources that I could
find to learn how to create the model. After combing through websites for a background of the
purposes and key components and watching hours of crash course videos online of different
people’s approaches to this subject, I felt informed enough to try to make my own. The model I
created included two pages of assumptions and four pages of cash flow analysis based on these
assumptions. The first page of the assumptions consisted of general information about the
property, financing details, and investment strategy specifics, while the second assumptions page
could be filled in with estimated construction costs if the project called for development. The
other four pages would then be populated with forecasted monthly, annual, and partnership cash
flows as well as a summary of the equity and returns during the investment period. Below are
excerpts from the cover assumptions page and the partnership cash flow forecasts in the English
version of the model:
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On Friday, after I was confident that my model would be up to the standards of the
management team, I scheduled a meeting to present it to them that afternoon and began working
on a presentation covering a brief introduction to commercial real estate investing, the necessary
due diligence before taking on these projects, and other factors involving the legal, tax, and
environmental implications.
Week Nine Reflection
Approaching the end of my internship, I was determined to finish my last project and
give it my best to leave a good last impression on the company and contribute something that I
could be proud of. Like many of the projects that I had worked on, I did not have defined
instructions for how to complete this project or exactly how it would be used, so I attempted to
make the model as versatile as possible without sacrificing its usefulness. This lack of experience
and structure made it difficult for me to feel sure that I had done this correctly. Furthermore, a
lack of training in my classes and people at the company that I could ask for help made me feel
at times as if I was not entirely competent enough to be relied on for this project, especially
considering it was the first big project to work on by myself while being an intern at TuaTeam.
Nevertheless, I knew this kind of responsibility would be something that I would face throughout
my career, and it taught me to be more trusting in my judgment. When I finished the project, I
was surprised but delighted that the only feedback I received from my boss was positive rather
than critical, and I uploaded the model and presentation to the company’s database for future use.
Literature Review
The research that I conducted during my time at TuaTeam allowed me to develop a
foundation for understanding the scope of my industry and demonstrated to me the prevalence of
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AI in finance. Through this exposure, I have decided to dedicate a significant amount of time to
my future learning goals of learning about the incorporation of machine learning in investment
analysis. According to a recent report published by the White House about the potential
implications of AI in the workforce, machine learning is “a branch of computational statistics
that focuses on designing algorithms that can automatically and iteratively build analytical
models from new data.” This subset gives AI its power to learn patterns and make decisions or
predictions based on data.
One method used by advanced investors is algorithmic trading, which relies on
mathematical models to execute trades at optimal times and high frequencies. While the
development or purchase of a platform may be expensive, by removing the emotion from trading
and the time-consuming process of analyzing all the desired factors, algorithmic traders can
improve many factors in their investing, such as efficiency, risk management, and diversification,
while monitoring the market 24/7. Another benefit to this strategy is that if supplied with a
source of real-time data in large amounts, it can continuously execute decisions based on
technical, fundamental, and investor sentiment analysis. Given the rapid growth of computing
power due to Moore’s Law and recent advancements in big data, these methods requiring
copious amounts of extractions can now be used frequently by hedge funds and investment
banks.
Predictive analytics is a type of algorithmic trading that can incorporate machine learning
to build investment forecasting models, though it currently has a wide range of applications
given its ability to statistically predict many events given historical data. Most commonly in
banking, it is utilized to estimate credit risk and financial metrics. It is also increasingly being
used in investment management to maximize the return and minimize the risk of a portfolio.
Different types of predictive models can categorize and view data in different ways, such as by
identifying outliers in data points, evaluating data over time, and clustering securities and their
characteristics based on shared sets of behaviors. One of the advantages of combining machine
learning with predictive analytics is the ability of AI tools to improve the accuracy of their
forecasts over time by constantly adapting to new information.
While the previously mentioned techniques for incorporating machine learning into
investing rely heavily on technical analysis for the most part, many firms hold investment
strategies that are more dependent on fundamental analysis. This is the analysis of a security’s
value based on market conditions, events, and financial statement metrics of profitability among
other things. Artificial intelligence can be used to efficiently update models based on financial
statement analysis and events to complement the qualitative analysis conducted by finance
professionals. This feature has the potential to provide a significant advantage over investors
who develop static models, as it is often true in forecasting a company’s performance that the
inputs into forecasting methods have nuanced and non-linear relationships with their outputs. For
example, some industry professionals tend to remove the effects of financing structures from
their valuation techniques by using measures such as EBITDA to simplify the comparison of
earnings among competitors. While it is more useful to focus on operating activities in creating a
model, there have been multiple cases of managers of a company making decisions that are not
aligned with the values of the shareholders based on the equity/debt financing situation of a
company. Machine learning techniques can be used to determine an appropriate weight for such
factors and include them in the model’s output.
Another use for machine learning that has seen increasing areas of development and
focus in the last decade is natural language processing for sentiment analytics. Sentiment
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analytics is the process of extracting and classifying subjective information from text. There are
two keys behind the use of this tool in gaining investment insight: analysis of public sentiment
and management sentiment. Sources such as the news, analyst reports, and social media contain
vast amounts of data that have a significant influence on the prices of securities relative to their
intrinsic value. Information that is misinterpreted by the public drives market inefficiencies and
can allow investors to anticipate price movements. Furthermore, the extraction of information
from earnings calls can give an investor an edge in putting together an accurate picture of a
company’s strategy and outlook. Executives who speak on these earnings calls have information
about the company that is not available to the public and would have a material effect on
analyst/investor forecasts. AI has been proven to have the capability of identifying the tone and
meanings of words in different contexts to provide a more holistic view of how investors and
employees view different securities.
Recognizing the prevalence of AI in finance, particularly in algorithmic trading,
predictive analytics, and sentiment analytics through natural language processing, has inspired
my commitment to furthering my expertise in this dynamic field. The potential of machine
learning to enhance decision-making, risk management, and market insights is evident, with
applications ranging from technical analysis to fundamental analysis. As the financial landscape
continues to evolve, the integration of AI technologies proves to be a crucial driver of efficiency,
accuracy, and adaptability, shaping the future of investment strategies and portfolio management.
Conclusion
My role at TuaTeam gave me a unique perspective on the importance of intermediaries
and consultants in connecting businesses with opportunities. The research that our team did
allowed businesses to pursue opportunities to develop groundbreaking technologies and engage
in culturally significant events for the betterment of communities in Spain and surrounding
countries. My experience also showed me the important role that artificial intelligence will play
in the future of business. There is almost an unlimited number of tasks and processes that can be
improved or automated by AI. I experienced this firsthand with the use of Beautiful.ai. This
software allowed me to quickly create high-quality presentations. Beautiful.ai gives users the
ability to collaborate on and present presentations virtually and seamlessly. Furthermore, by
utilizing the design and content generation features of the program, the presentations I created
with my team communicated our messages more effectively.
The work environment that I found myself in was very different than what I expected
before beginning my internship, but I think that this was beneficial in broadening my horizons
past my expectations from my classroom experience and previous internships I’ve held in
finance. I was also very fortunate to have intelligent and hard-working coworkers from diverse
cultural backgrounds that I could learn from. I also had the opportunity to adapt to the many
cultural differences that exist between the United States and Spain, from the longer hours and
siestas that many workplaces adhere to in Spain to the more nuanced differences in hierarchy and
work relationships. Furthermore, I learned valuable skills in communication through my
endeavors to understand and use the native language.
Most importantly, my internship gave me exposure to acquisitions and investments in
real-world alternatives. It gave me the chance to see the valuation of a business from the
perspective of a company in the process of an acquisition. Utilizing the skills of analyzing the
competitive environment of a company as well as the strengths in its core competencies and
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potential weaknesses in its management and financial structure will be extremely useful for me
in my future career in investments and financial analysis. Some of our clients also had specific
needs in investing that could not be suited by traditional investments. Economic circumstances
occasionally arise in which the negative correlation between equity and debt securities cannot be
relied upon to provide investors with the level of diversification necessary to reduce their overall
risk. For investors with longer time horizons, investments in private equity and real estate have
the potential to provide enhanced returns and greater stability during periods of market volatility.
I recently accepted a role at a wealth management firm where I will be analyzing portfolios of
stocks and bonds, as well as modeling commercial real estate investments in Northwest Arkansas
and the Midwest. I am glad to have had this opportunity to explore this field early in my career
and to be able to demonstrate the skills I have developed thus far as I continue to learn.
