• Like
  • Save
Venture Capital Method of Valuation
Upcoming SlideShare
Loading in...5
×
 

Venture Capital Method of Valuation

on

  • 5,320 views

 

Statistics

Views

Total Views
5,320
Views on SlideShare
5,319
Embed Views
1

Actions

Likes
3
Downloads
132
Comments
0

1 Embed 1

http://www.slideshare.net 1

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • Seed: proof of concept Start-up: set-up production and initial sales Early stage: full scale operations and market development Second stage: expansion Exit: harvest CCG Seed prototype show to customeres investors: #250K + #50K business plan got oreder for 6 systems Start-up site in Cambridge 2,000sq ft ordered materials and parts 5 people Sales Director cashed check Early 2 sites same business park 5,000 sq ft distributor Europe CFO High margins 60%+ lose control Second stage new location 20,000 sq ft 45 people to 75 Marketing Director bank loans offices in Paris and Frankfurt US market Exit partner Carlton for US #12 million
  • Info on valuations
  • Info on valuations

Venture Capital Method of Valuation Venture Capital Method of Valuation Presentation Transcript

  • Business Plan Preparation Frank Moyes College of Business and Administration University of Colorado Boulder, Colorado
  • Required Return on Investment
    • Seed 80%+
    • Start-Up 60%
    • Early Stage 50%
    • Second Stage 40%
    • Third Stage 30%
    • Bridge 25%
    • 19x
    • 10x
    • 8x
    • 5x
    • 4x
    • 3x
    ROI 5 yr. Increase Bygraves & Zacharakis 0
  • Venture Capital Method Key Assumptions
    • Net Profit
    • Valuation Multiple
      • Price/Earnings
      • Price/Revenue
      • Price/EBITDA
      • Price/Seller’s Discretionary Earnings
    • Investor ROI
  • Venture Capital Method Mountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million
  • Venture Capital Method Mountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value ?
  • Venture Capital Method Mountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million
  • Venture Capital Method Mountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Equity value $30 million Required ROI ? Required Increase Required $ value
  • Venture Capital Method Mountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million Required ROI 60% Required Increase ? Required $ value
  • Venture Capital Method Mountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million Required ROI 60% Required Increase 10x Required $ value ?
  • Venture Capital Method Mountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million Required ROI 60% Required Increase 10x Required $ value $10 million % of company required ?
  • Venture Capital Method Mountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million Required ROI 60% Required Increase 10x Required $ value $10 million % of company required 33% Pre-money valuation ? Post-money valuation ?
  • Venture Capital Method Mountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million Required ROI 60% Required Increase 10x Required $ value $10 million % of company required 33% Pre-money valuation $2 million Post-money valuation $3 million
  • Venture Capital Method Mountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $ 2 million Growth Rate 20% 30% P/E multiple 15x ? Company value $30 million ? Required ROI 60% ? Required Increase 10x ? Required $ value $10 million ? % of company required 33% ? Pre-money valuation $2 million ? Post-money valuation $3 million ?
  • Venture Capital Method Mountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $ 2 million Growth Rate 20% 30% P/E multiple 15x 20x Company value $30 million ? Required ROI 60% ? Required Increase 10x ? Required $ value $10 million % of company required 33% Pre-money valuation $2 million Post-money valuation $3 million
  • Venture Capital Method Mountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $ 2 million Growth Rate 20% 30% P/E multiple 15x 20x Company value $30 million $40 million Required ROI 60% 60% Required Increase 10x 10x Required $ value $10 million ? % of company required 33% ? Pre-money valuation $2 million ? Post-money valuation $3 million ?
  • Venture Capital Method Mountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $ 2 million Growth Rate 20% 30% P/E multiple 15x 20x Company value $30 million $40 million Required ROI 60% 60% Required Increase 10x 10x Required $ value $10 million $10 million % of company required 33% 25% Pre-money valuation $2 million ? Post-money valuation $3 million ?
  • Venture Capital Method Mountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $ 2 million Growth Rate 20% 30% P/E multiple 15x 20x Company value $30 million $40 million Required ROI 60% 60% Required Increase 10x 10x Required $ value $10 million $10 million % of company required 33% 25% Pre-money valuation $2 million $3 million Post-money valuation $3 million $4 million
  • Venture Capital Method Mountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $1 million Growth Rate 20% 10% P/E multiple 15x ? Company value $30 million Required ROI 60% Required Increase 10x Required $ value $10 million % of company required 33% Pre-money valuation $2 million Post-money valuation $3 million
  • Venture Capital Method Mountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $1 million Growth Rate 20% 10% P/E multiple 15x 10x Company value $30 million ? Required ROI 60% Required Increase 10x Required $ value $10 million % of company required 33% Pre-money valuation $2 million Post-money valuation $3 million
  • Venture Capital Method Mountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $1 million Growth Rate 20% 10% P/E multiple 15x 10x Company value $30 million $10 million Required ROI 60% ? Required Increase 10x ? Required $ value $10 million ? % of company required 33% Pre-money valuation $2 million Post-money valuation $3 million
  • Venture Capital Method Mountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $1 million Growth Rate 20% 10% P/E multiple 15x 10x Company value $30 million $10 million Required ROI 60% 60% Required Increase 10x 10x Required $ value $10 million $10 million % of company required 33% ? Pre-money valuation $2 million ? Post-money valuation $3 million ?
  • Venture Capital Method Mountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $1 million Growth Rate 20% 10% P/E multiple 15x 10x Company value $30 million $10 million Required ROI 60% 60% Required Increase 10x 10x Required $ value $10 million $10 million % of company required 33% 100% Pre-money valuation $2 million ?! Post-money valuation $3 million ?!
  • Venture Capital Method Key Assumptions
    • Net Profit
    • P/E Multiple
    • Investor ROI