Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
8Activity
0 of .
Results for:
No results containing your search query
P. 1
VC Method Valuation Template (www.gazhoo.com)

VC Method Valuation Template (www.gazhoo.com)

Ratings:

4.71

(1)
|Views: 2,125|Likes:
Published by www.gazhoo.com
Excel template for doing valuation with VC Method. Ideal for entreprenuers and VCs.

venture capital, vc method, finance, valuation, pre-money, post-money, harvest, template, model
Excel template for doing valuation with VC Method. Ideal for entreprenuers and VCs.

venture capital, vc method, finance, valuation, pre-money, post-money, harvest, template, model

More info:

Published by: www.gazhoo.com on Mar 06, 2009
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF or read online from Scribd
See more
See less

05/10/2014

 
Entrepreneur's Assumptions
 
3$90,000,00060.00%$21,972,656$7,159,37632.58%
 
Investor's Assumptions
 
4$81,000,00060.00%$12,359,619$8,008,89564.80%Years to complete, success-scenario harvest value, and amount of investment as an irrevocable commitment are from figure 4.The hurdle rate is selected by the venture capitalist based on judgment. The entrepreneur's initial valuation can be determinedby changing the assumed hurdle rate to 18 percent in the first panel.
 
Venture Capital Method (Single Round Financing)
Number of years until your projected harvest dateHarvest-date value of the venture assuming successannual hurdle rate
Customary discount rates for Seed to Start-up venturesare 50-100% per year. Discount rates are lower for more established
 Post-money valuation of the venture
 
Valuation: Venture Capital Method
F
raction of harvest-date equity needed to justify the financing
.
 Amount of financing required
get the template at www.gazhoo.com
Number of years until your projected harvest dateAmount of financing required
 F
raction of harvest-date equity needed to justify the financing
.
 Harvest-date value of the venture assuming successannual hurdle rate
Customary discount rates for Seed to Start-up venturesare 50-100% per year. Discount rates are lower for more establishedventures, declining gradually to tares of 20-30% for expansion-stage financing.The discount rate for turnaround financing is comparable to that of a start-up.
 Post-money valuation of the venture
 Venture Capital Method
 
Staging
 
www.gazhoo.com
CompleteSuccessSuccessFund Stage 4:Boat OwnersSuccessFund Stage 3:Marine OEMSuccess withThree GroupsSuccessFund Stage 2:Aircraft OwnersFailureStop InvestingSuccess with TwoGroupsFund Stage 1:Avionics OEMFailureStop InvestingSuccess with OneGroupFailureAbandonFailure
Financing:
Round 1 Round 2 Round 3 Round 4 Harvest
 
Staged Investment Decision Model
Staged investment model of aircraft and marine navigation software venture. The aircraft market is pursued before the marine market, and OEM salesare pursued in each market before end users. Options to invest in development of new markets are exercised only if the prior effort was successful.
 
Figure 4
 Panel (a)
 www.gazhoo.com
 ConditionalCash FlowsScenarioProbabilities Round OneRoundTwo Round Three Round Four Harvest Value Forecast
 Success with All Groups $90,000,000 20% $18,000,000 $27,692,308 $32,727,273 $51,428,571Success with Three Groups $60,000,000 15% $9,000,000 $13,846,154 $16,363,636 $25,714,286Success with Two Groups $25,000,000 20% $5,000,000 $7,692,308 $9,090,909Success with One Group $15,000,000 10% $1,500,000 $2,307,692Failure $0 35% $0
 Expected Cash Flow at Harvest $33,500,000 $51,538,462 $58,181,818 $77,142,857Standard Deviation of Cash Flows $34,427,460 $29,896,270 $27,738,448 $14,846,150Investment
 Burn Rate per Year $2,000,000 $3,000,000 $2,500,000 $3,000,000Years 1 0.5 1 0.5Total Investment $7,500,000Present Value of Unconditional Total Investment $7,159,376Present Value of Expected Investment $4,709,907
 Panel (b)
 ConditionalCash FlowsScenarioProbabilities Round OneRoundTwo Round Three Round Four Harvest Value Forecast
 Success with All Groups $81,000,000 18% $14,580,000 $22,430,769 $31,695,652 $48,600,000Success with Three Groups $54,000,000 12% $6,480,000 $9,969,231 $14,086,957 $21,600,000Success with Two Groups $22,500,000 16% $3,600,000 $5,538,462 $7,826,087Success with One Group $13,500,000 8% $1,080,000 $1,661,538Failure $0 46% $0
 Expected Cash Flow at Harvest $25,740,000 $39,600,000 $53,608,696 $70,200,000Standard Deviation of Cash Flows $31,047,261 $28,371,817 $25,104,545 $13,227,245Investment
 Burn Rate per Year $1,800,000 $2,500,000 $2,000,000 $2,500,000Years 1.25 1 1.25 0.5Total Investment $8,500,000Present Value of Unconditional Total Investment $8,008,895Present Value of Expected Investment $4,915,176
Entrepreneur's Assumptions - Financial Model Based on Business PlanInvestor's Assumptions - Financial Model Based on Business Plan
 
Figure 4
Panel (a) shows the entrepreneur's expectations of harvest cash flows conditional on each scenario and the entrepreneur's belief of the probability of each scenario. These inputs are used to compute the expected harvest cash flow and standard deviation of cash flows at the time of each investment round.The lower portion of the panel shows the entrepreneur's assumed burn rate from each stage and the entrepreneur's expectation of the duration of the stage.The information is used to compute the total investment, present value of the total as an unconditional investment, and present value of expected investment.Panel (b) shows the same information based on the investor's beliefs.

Activity (8)

You've already reviewed this. Edit your review.
gopalid1 liked this
1 thousand reads
1 hundred reads
Najam liked this
Vlad Anton liked this
Mahfuzul liked this
mazhar liked this
reizch liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->