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  • Startup Valuation: Venture Capital Method: Step 1: Discount The Terminal Value To Present Value

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    Deepak kumar Singh
    39 views2 pages
    This document provides a template for valuing a startup using the venture capital method. It outlines two main steps: 1) discounting the terminal value to present value using formulas for annual earnings, exit year, PE multiple, required rate of return, and firm value. 2) Calculating the required ownership percentage with inputs for initial investment, equity stake, outstanding shares pre-money and post-money, shares owned by VC, share price, and pre-money and post-money valuations. Formulas are needed for cells highlighted in yellow to perform the calculations.

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    VC Method Template

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    This document provides a template for valuing a startup using the venture capital method. It outlines two main steps: 1) discounting the terminal value to present value using formulas for annual earnings, exit year, PE multiple, required rate of return, and firm value. 2) Calculating the required ownership percentage with inputs for initial investment, equity stake, outstanding shares pre-money and post-money, shares owned by VC, share price, and pre-money and post-money valuations. Formulas are needed for cells highlighted in yellow to perform the calculations.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    39 views2 pages

    Startup Valuation: Venture Capital Method: Step 1: Discount The Terminal Value To Present Value

    Uploaded by

    Deepak kumar Singh
    This document provides a template for valuing a startup using the venture capital method. It outlines two main steps: 1) discounting the terminal value to present value using formulas for annual earnings, exit year, PE multiple, required rate of return, and firm value. 2) Calculating the required ownership percentage with inputs for initial investment, equity stake, outstanding shares pre-money and post-money, shares owned by VC, share price, and pre-money and post-money valuations. Formulas are needed for cells highlighted in yellow to perform the calculations.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    Startup Valuation: Venture Capital Method

    Feel free to use this task template to get you started on valuing a startup using the venture capital method.
    Consider what formulas should go in Column D to enable you to obtain a pre-money and post-money valuation

    Step 1: Discount the Terminal Value to Present Value

    Annual Earnings (Projected net income at exit date)


    In Year (i.e. exit date)
    PE Multiple
    Required Rate of Return
    Value of firm

    Step 2: Calculate the Required Ownership Percentage

    Initial Investment
    Equity Stake

    Current Outstanding Shares (i.e. pre-money)


    Total Outstanding Shares (i.e. post-money)
    VC Owns # Shares
    Share Price

    Pre-Money Valuation
    Post-Money Valuation
    nture capital method.
    nd post-money valuation

    Cells highlighted in yellow indicate that the values are inputs

    What formula should go here?

    What formula should go here?

    What formula should go here?


    What formula should go here?
    What formula should go here?

    What formula should go here?


    What formula should go here?

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