Venture Capital Valuation
Case Studies and Methodology + Website
(Sprache: Englisch)
Very few of the decision makers involved in a venture backed company have a definitive understanding of how valuation techniques are being applied to their financial statements and their decision making process. This casebook provides a quick and accurate...
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Very few of the decision makers involved in a venture backed company have a definitive understanding of how valuation techniques are being applied to their financial statements and their decision making process. This casebook provides a quick and accurate road map on how valuation techniques used for tax, financial reporting and deal structure impact a company's past, present and future. The book includes real world case studies to simplify this complex subject for the practitioners serving companies, the founders and executives running the companies, and the investors that fund the companies.
Real-world case studies clarify valuation principles to help readers maximize returns When founders, VCs, angels, attorneys, CFOs, CEOs, and employees don't understand the true meanings of "value" and "valuation," they end up losing money-lots of money. Venture Capital Valuation is for anyone involved in a venture capital- or angel-backed private company who wants to get the most out of their investments by controlling one of the few things they can when dealing with high-velocity, risky investments: their understanding of valuation.
Lorenzo Carver, author and developer of the #1 selling, award-winning small-business valuation solution software, shares his decades of experience simplifying the high-growth company valuation process for clients in every business sector. Anchored by scores of high-profile examples, Venture Capital Valuation deftly illustrates how stakeholders in a given startup or high-growth company could have improved their outcomes by having better information about valuation.
Helping readers answer such vital valuation questions as "What's this company worth?" "Is this a fair valuation?" and "Are we leaving too much money on the table?" Venture Capital Valuation dissects the valuation profiles of some of today's leading corporations, including:
- Facebook
- Twitter
- LinkedIn
- Microsoft
- Yahoo!
- Kayak.com
- Zogenix
- Plus, interviews with venture-backed company valuation experts Jeff Faust, Josh Cashman, and Joe Orlando
A companion website allows readers to access and download additional material mentioned throughout the text.
Don't wait until it's too late. Learn how "value" changes rights to cash flow at every stage of a company's evolution with Venture Capital Valuation.ven startup or high-growth company could have improved their outcomes by having better information about valuation
Lorenzo Carver, author and developer of the #1 selling, award-winning small-business valuation solution software, shares his decades of experience simplifying the high-growth company valuation process for clients in every business sector. Anchored by scores of high-profile examples, Venture Capital Valuation deftly illustrates how stakeholders in a given startup or high-growth company could have improved their outcomes by having better information about valuation.
Helping readers answer such vital valuation questions as "What's this company worth?" "Is this a fair valuation?" and "Are we leaving too much money on the table?" Venture Capital Valuation dissects the valuation profiles of some of today's leading corporations, including:
- Microsoft
- Yahoo!
- Kayak.com
- Zogenix
- Plus, interviews with venture-backed company valuation experts Jeff Faust, Josh Cashman, and Joe Orlando
A companion website allows readers to access and download additional material mentioned throughout the text.
Don't wait until it's too late. Learn how "value" changes rights to cash flow at every stage of a company's evolution with Venture Capital Valuation.ven startup or high-growth company could have improved their outcomes by having better information about valuation
Inhaltsverzeichnis zu „Venture Capital Valuation “
Acknowledgments ixIntroduction What You Don't Know About Valuation Will Cost You Money 1
Chapter 1 Using Facebook, Twitter, and LinkedIn to Explain VC Valuation Gains and Losses: How VCs, Angels, Founders, and Employees Give Up Investment Cash Flow Every Day 13
Did Valuation Ignorance Cost ConnectU (and the Winklevosses) $50MM? 14
An Expert Doesn't Need a 409A Valuation When He or She Has a Certificate and Basic Math 15
Valuing Facebook's Common Stock Compared to Preferred Stock in Minutes 16
What the Winklevosses Would Have Seen in Any 409A Valuation Report 19
Deriving a Discount for Lack of Marketability for Valuations 27
Facebook at $80 Billion Valuation versus Enron at $80 Billion Valuation 35
Deal Terms, Waterfalls, and the Pre-Money Myth 36
The Pre-Money Myth 44
Summary 56
Chapter 2 Should Venture-Backed Companies Even Consider a DCF Model?: Introducing the Life Science Valuation Case: Zogenix 57
Zogenix: Company Background Summary and Highlights 58
Leaping Forward Just 20 Months, the Company Files for an IPO 64
Order of Valuations Presented in This Case 67
Chapter 3 Valuation Methods versus Allocation Methods Regarding Zogenix 69
Separating Enterprise Value from the Allocation of That Value 69
Valuing Total Equity 72
Using Future Value (FV) and Present Value (PV) to Value Future Cash Flows Today 79
Summary 82
Chapter 4 Applying the Typical DCF Model to a Venture-Backed Company Hardly Ever Works 85
The Gordon Growth Model 85
High Growth Limits the Gordon Growth Model 87
Dividend Irrelevance and Capital Structure Irrelevance 90
Using Comparables (Generally Market Multiples) to Generate a Terminal Value 91
Actual Differences between Angels and VCs versus Perceived Differences 100
Applying Valuation Methods and Allocation
... mehr
Methods at Inception 102
Summary 104
Chapter 5 "Enterprise Value" + "Allocation Methods" = Value Destruction: Undervaluing Companies and Overvaluing Employee Options 107
Most 409A Valuations Undervalue the Company and Simultaneously Overvalue Employee Stock Options 107
Did Auditors Drive Valuators to Overvalue Employee Stock Options? 109
Most 409A Enterprise Value Calculations Ignore the "Takeover" Value of Preferred 113
The Realistic Range of Possibilities Depends on Who the Investors Are 119
Overstating Returns and Understating Returns on the Same Asset (Simultaneously) 125
What Happens to Fund IRRs When You Assume Book Value Equals Market Value? 128
The Real Cost of Fair Value, Fair Market Value, and Enterprise Value 132
Yahoo! Case 137
Chapter 6 Why You Should D.O.W.T. (Doubt) Venture Capital Returns--Option Pool Reserve 159
Unissued Option Pools 159
Value Conclusion Elements Impacted by Option Pool Reserve Assumptions 161
Impact on Parties Relying on Assumptions of VC Investments 176
Chapter 7 If Valuation Can't Make You Money, Do You Really Need It?: Learning Practical Applications from Kayak.com 183
Applying Studies to Real-World Cases 186
Important Questions to Ask 213
Summary 223
Chapter 8 Don't Hate the Appraiser (Blame the Auditor Instead) 225
Interview with Jeff Faust, AVA 226
Summary 236
Chapter 9 Don't Blame the Auditors (Blame the Practice Aid Instead): 409A Valuation Professionals Discussing Topic 820 (FAS 157) with VC CFOs 237
Introduction to the Expert Panelists 238
The Auditor's Valuation "Bible" 239
SAS101 Tests, PWERMS, a
Summary 104
Chapter 5 "Enterprise Value" + "Allocation Methods" = Value Destruction: Undervaluing Companies and Overvaluing Employee Options 107
Most 409A Valuations Undervalue the Company and Simultaneously Overvalue Employee Stock Options 107
Did Auditors Drive Valuators to Overvalue Employee Stock Options? 109
Most 409A Enterprise Value Calculations Ignore the "Takeover" Value of Preferred 113
The Realistic Range of Possibilities Depends on Who the Investors Are 119
Overstating Returns and Understating Returns on the Same Asset (Simultaneously) 125
What Happens to Fund IRRs When You Assume Book Value Equals Market Value? 128
The Real Cost of Fair Value, Fair Market Value, and Enterprise Value 132
Yahoo! Case 137
Chapter 6 Why You Should D.O.W.T. (Doubt) Venture Capital Returns--Option Pool Reserve 159
Unissued Option Pools 159
Value Conclusion Elements Impacted by Option Pool Reserve Assumptions 161
Impact on Parties Relying on Assumptions of VC Investments 176
Chapter 7 If Valuation Can't Make You Money, Do You Really Need It?: Learning Practical Applications from Kayak.com 183
Applying Studies to Real-World Cases 186
Important Questions to Ask 213
Summary 223
Chapter 8 Don't Hate the Appraiser (Blame the Auditor Instead) 225
Interview with Jeff Faust, AVA 226
Summary 236
Chapter 9 Don't Blame the Auditors (Blame the Practice Aid Instead): 409A Valuation Professionals Discussing Topic 820 (FAS 157) with VC CFOs 237
Introduction to the Expert Panelists 238
The Auditor's Valuation "Bible" 239
SAS101 Tests, PWERMS, a
... weniger
Autoren-Porträt von Lorenzo Carver
Lorenzo Carver, MS, MBA, CVA, CPA, is CEO of Liquid Scenarios, a technology-based financial business intelligence solution company that provides services to investors, practitioners, entrepreneurs, and academics on how to measure and realize high-growth venture value. Carver has a twenty-year track record of helping thousands of clients understand how to measure and realize high-growth venture value. He is the author and developer of BallPark Business Valuation, the #1 selling, award-winning small-business valuation solution software covered by Bloomberg Businessweek, Entrepreneur, CPA Software News, The Kim Komando Show, and business journals worldwide.
Bibliographische Angaben
- Autor: Lorenzo Carver
- 2012, 1. Auflage, 304 Seiten, Maße: 15,7 x 23,5 cm, Gebunden, Englisch
- Verlag: Wiley & Sons
- ISBN-10: 0470908289
- ISBN-13: 9780470908280
- Erscheinungsdatum: 08.03.2012
Sprache:
Englisch
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