Share value estimate computation: (E/S times P/E = P/S where E=Earnings, S=Share and P=Price) Earnings/share

times Earnings multiple = Share value estimate

ROI computation: ROI = ( Share value estimate in the last quarter minus Share price paid by Venture Capitalists)
divided by Share price paid by Venture Capitalists

Note: when you report back to the investor at the end of the exercise, be sure to use the actual Price per share in
the last quarter. You may then compare your actual ROI to the one you had projected during the Business Plan
presentation.

COMPUTATION OF SHARE PRICE AND ROI FOR THE VENTURE CAPITALISTS

ENTER VALUE IN
Column 1 EMPTY, HIGHLIGHTED Explanation
CELLS

When you run your pro forma statements, enter the Earnings
EPS (Earnings per
Share) 631 per Share number in the last quarter (this number can be found
in the Income Statement)

It is recommended to use a Earnings multiple of 10 (but you may

pick another value as long as you can justify it). A Price Earnings
Earnings multiple (also
known as Price Earnings 10 ratio of 10 means an investor is willing to pay $10 for each $1 of
earnings or wait 10 years to earn back the original investment
Ratio) (assuming no inflation). You can decide what makes sense for
this early stage of the industry.

This number is automatically computed. You should regard this

Share value estimate 6310 number as a reflection of the value of one share of the company
for the last quarter in the last quarter of play, not as a stock market transaction.

(Expected Price per share minus Price paid in Business Plan

ROI formula: intentionally blank Quarter) divided by Price paid in business plan quarter times
100

Enter the price you are requesting (when you have the offers
Share price paid by VC 120 from the investors, you may update this price with the actual
offer) in the cell to the left.

5158% This number is automatically computed and is based on the

ROI Expected Price per share and the Price paid by the investors.