· The Startup Valuation Explorer
· Expanded coverage of Valuation Methods
· Responding to investor questions about your valuation
· Understanding option pool impact on your valuation
For many early-stage entrepreneurs assigning a pre-money valuation to your startup is one of the more daunting tasks encountered during the fundraising quest. This guide provides a quick reference to all of the key topics around early-stage startup valuation and provides step-by-step examples for several valuation methods.
This Founder’s Pocket Guide helps startup founders learn:
• What a startup valuation is and when you need to start worrying about it.
• Key terms and definitions associated with valuation, such as pre-money, post-money, and dilution.
• How investors view the valuation task, and what their expectations are for early-stage companies.
• How the valuation fits with your target raise amount and resulting founder equity ownership.
• How to do the simple math for calculating valuation percentages.
• How to estimate your company valuation using several accepted methods.• What accounting valuation methods are and why they are not well suited for early-stage startups.
The family enterprise, whether an operating business, a family office, or both, is the backbone of the US and international economies. These enterprises cut across industries and geographies and can be first-generation entrepreneurial companies or multi-generational businesses with family offices. This book offers a foundation in and understanding of how family enterprises work, including working definitions and the key characteristics of family enterprises, as well as useful concepts for working with and in family enterprises, either as a professional or as a family member.Written by the experts at the Family Firm Institute, a global network of professionals, educators, researchers, and owners of family enterprises An ideal resource for professionals in law, finance, management, and behavioral science, family office and fund managers, and others interested in an multidisciplinary approach to this field
Corporate Valuation presents the most up-to-date tools and techniques for more accurate valuation in a highly volatile, globalized, and risky business environment. This insightful guide takes a multidisciplinary approach, considering both accounting and financial principles, with a practical focus that uses case studies and numerical examples to illustrate major concepts. Readers are walked through a map of the valuation approaches proven most effective post-crisis, with explicit guidance toward implementation and enhancement using advanced tools, while exploring new models, techniques, and perspectives on the new meaning of value. Risk centrality and scenario analysis are major themes among the techniques covered, and the companion website provides relevant spreadsheets, models, and instructor materials.
Business is now done in a faster, more diverse, more interconnected environment, making valuation an increasingly more complex endeavor. New types of risks and competition are shaping operations and finance, redefining the importance of managing uncertainty as the key to success. This book brings that perspective to bear in valuation, providing new insight, new models, and practical techniques for the modern finance industry.Gain a new understanding of the idea of "value," from both accounting and financial perspectives Learn new valuation models and techniques, including scenario-based valuation, the Monte Carlo analysis, and other advanced tools Understand valuation multiples as adjusted for risk and cycle, and the decomposition of deal multiples Examine the approach to valuation for rights issues and hybrid securities, and more
Traditional valuation models are inaccurate in that they hinge on the idea of ensured success and only minor adjustments to forecasts. These rules no longer apply, and accurate valuation demands a shift in the paradigm. Corporate Valuation describes that shift, and how it translates to more accurate methods.
In detail, this Founder’s Pocket Guide helps startup founders learn:
• What convertible debt is and how it can be an important fundraising structure.
• Key terms and definitions associated with convertible debt, such as conversion triggers, valuation caps, and conversion discounts.
• Key advantages and disadvantages of using convertible debt as a funding structure.
• How investors view the convertible debt, and what their expectations are for early-stage investment deals.
• Simple math for calculating the impact of conversion discount rates and resulting equity ownership on conversion.
• Example convertible debt deals illustrating how convertible debt benefits both founders and investors alike.
Sharing his twenty-year track record helping thousands of investors, practitioners, and entrepreneurs measure and realize high-growth venture, author Lorenzo Carver draws on real-world cases from investors, founders, and advisors to illustrate how each corporation was impacted by valuations. By putting these techniques into a context and framework, Venture Capital Valuation simplifies them so that anyone founding, running, and investing in these innovative companies can apply them immediately.
Featuring a companion website where readers can access and download additional case study material, as well as different valuation materials mentioned throughout the text, Venture Capital Valuation explores:Why what you don't know about valuation will cost you money How VCs, angels, founders, and employees give up investment cash flow every day Facebook at $80 billion valuation versus Enron at $80 billion valuation Deal terms, waterfalls, and the pre-money myth Whether venture-backed companies should even consider a discounted cash flow (DCF) model Separating enterprise value from the allocation of that value Valuing total equity Using Future Value (FV) and Present Value (PV) to value future cash flows today Why applying the typical DCF model to a venture-backed company hardly ever works "Enterprise Value" + "Allocation Methods" = Value Destruction Undervaluing companies and overvaluing employee options Why you should D.O.W.T. (doubt) venture capital returns 409A valuation professionals discussing topic 820 (FAS 157) with VC CFOs
An invaluable resource for anyone who wants to make the most out of their investments, Venture Capital Valuation shows business appraisers and venture capitalists how to maximize their returns and avoid losing money—before the damage becomes irreparable.
The Entrepreneurial Bible to Venture Capital is packed with invaluable advice about how to raise angel and venture capital funding, how to build value in a startup, and how to exit a company with maximum value for both founders and investors. It guides entrepreneurs through every step in an entrepreneurial venture from the legalities of raising initial capital to knowing when to change tactics.Andrew Romans is the co-founder and general partner of Rubicon Venture Capital, a venture capital fund that invests in privately held technology companies and enables its investors to co-invest along side the fund on a deal-by-deal basis via innovative sidecar funds right up to IPO or M&A exit. Romans is also the founder and general partner of The Founders Club, a venture capital equity exchange fund and investor in later stage liquidity transactions.
Expanding on these fundraising concepts, this Founder’s Pocket Guide helps startup founders learn:
What a term sheet is and how to summarize the most important deal terms for your fundraising and startup building goals.
How preferred stock shares differ from common shares, with review of how each key preferred share right and preference is tied to the investor’s shares.
Key terms and definitions associated with equity fundraising, such as pre-money valuation, founder dilution, and down round.
How to decipher legalese associated with a term sheet deal, such as pro rata, fully diluted, and pari passu.
The full list of the most common term sheet clauses, their plain English meaning, and their importance to an early-stage investment deal.
Simple math for the key term sheet financial aspects, including calculating fully diluted shares outstanding, investor equity ownership percentages, and the impact of option pools on founder dilution.
Example exit scenarios, showing how term sheet deal points impact how exit proceeds get divided among investors and founders.
The Art of Startup Fundraising takes a fresh look at raising money for startups, with a focus on the changing face of startup finance. New regulations are making the old go-to advice less relevant, as startup money is increasingly moving online. These new waters are all but uncharted—and founders need an accessible guide. This book helps you navigate the online world of startup fundraising with easy-to-follow explanations and expert perspective on the new digital world of finance. You'll find tips and tricks on raising money and investing in startups from early stage to growth stage, and develop a clear strategy based on the new realities surrounding today's startup landscape.
The finance world is in a massive state of flux. Changes are occurring at an increasing pace in all sectors, but few more intensely than the startup sphere. When the paradigm changes, your processes must change with it. This book shows you how startup funding works, with expert coaching toward the new rules on the field.Learn how the JOBS Act impacts the fundraising model Gain insight on startups from early stage to growth stage Find the money you need to get your venture going Craft your pitch and optimize the strategy Build momentum Identify the right investors Avoid the common mistakes
Don't rely on the "how we did it" tales from superstar startups, as these stories are unique and applied to exceptional scenarios. The game has changed, and playing by the old rules only gets you left behind. Whether you're founding a startup or looking to invest, The Art of Startup Fundraising provides the up-to-the-minute guidance you need.