How to valuate your company, with Capricorn Venture Partners Finance for Startups event, May 28, 2013, @ICAB Brussels

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Finance for Startups
How to valuate your company,
with Capricorn Venture Partners
Martin van Wunnik
Xavier Corman

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Sponsors

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Finance for Startups
Introduction
• Financial Valuation Basics
• Non Financials Aspects
• Capricorn Venture Partners
• Q&A

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This presentation is available for free:
http://www.slideshare.net/XavierCorman
http://www.slideshare.net/FinanceCoach24

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Who we are
Martin van Wunnik
Xavier Corman

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Financial Valuation Basics
Based on Balance Sheet
Based on Profit & Loss Statement
DCF – Discounted Cash Flows
with WACC – Weighted Average Cost of Capital
& IRR – Internal Rate of Return

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Based on Balance Sheet
Net Assets = Total Assets – Total long term debts
Adjusted Net Assets = : +/- adjustments
Provisions, historical values (land, buildings),
‘normalized salaries’, …
Liquidation value :
Not going-concern (social liabilities, C4, …)
Goodwill, Customers, Patent, etc…

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Based on Profit & Loss Statement
Multiples based on:
Sales
EBITDA
EBIT
Taxable Profit
Net Profit
www.impulse.de
•

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DCF – Discounted Cash Flows

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WACC
Weighted Average Cost of Capital
Time & Risk
The WACC is the cost of each capital component,
multiplied by its proportional weight,
and then summing them up.

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Cost of Equity:
Which elements ?
re = rf + β × (rm − rf)
Capital Asset Pricing Model (CAPM)
rf = risk-free rate
β = equity beta (volatile)
(rm − rf) = market risk premium

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IRR – Internal Rate of Return
IRR makes DCF = 0
Present value of all future cash flow
= initial investment (i.e. break even)
The higher IRR, the better
(when all other factors are equal)

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Investor’s motivation
Return on investment
Social aspect
Influence on the management of the company

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IRR (Internal Rate Return)

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Evolution IRR/maturity

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Pré-money & Post-money

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Evolution IRR/maturity

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Idea MVP 1st clients Break-even TOTAL
Scenario 1 Capital increase 1.000.000 1.000.000
Shares investor 40%
Type of investor BA+VC
Cost of capital 100% 50% 35% 100%
Scenario 2 Capital increase 50.000 200.000 750.000 1.000.000
Shares investor 5% 15% + 4% = 23% 15%+13%+4%=31%
Type of investor FFF BA VC
Cost of capital 100% 50% 35% 41%
Cash need
IRR

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Scenario 1
•Premoney: 2M
•Investment : 1 M
•Postmoney : 3 M
•Shares for 0,5 M: 16,7 %
Scenario 2
•Premoney: 2M
•Investment : 0,5 M
•Postmoney : 2,5 M
•Shares for 0,5 M: 20 %

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Valuation - What is dilution ?

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Relution / Dilution

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Tools for relution
• Options (call/put)
• Warrants

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Capricorn Venture Partners
Free download :
http://www.slideshare.net/XavierCorman
http://www.slideshare.net/FinanceCoach24