Business Model, Strategy and Innovation

Venture Capitalist Method to Value a Startup

Assume you are a senior manager in a multi finance company. In the beginning of year, your boss
has assigned you as a project manager to develop a new platform-based business. The platform
basically matches users who want to sell and buy vehicles via online. The platform also invites
multi-finance companies to provide loan if the buyers need credit facilities. After going through
several experiments, target consumers seem interested in the services your platform offers.
Now is 2023, and it is the time to boost the platform revenue. It requires a series-A funding of Rp.
50 billion to expand the customer base. Currently, this new business is fully owned by the
company you work for, and it holds 10 million shares. You believe the business is able to achieve
gross transaction value (GTV) of Rp. 200 billion in the next three years (that is in 2026) if it receives
sufficient investment. The average GTV multiple for several similar companies is about 2.4. A new
investor, PT. Pastiventura, is interested with your new business, and hope to invest an amount of
money as you wish. PT. Pastiventura also estimates the relevant required return is 30%.
a. Calculate the pre-money and post-money valuation in 2023.
Also calculate the post-money valuation in 2026.
Investment
Pre-Money Post-Money

r = 30%
VC Investment 50.000.000.000,00 109.850.000.000,00

r = 30%
Startup Valuation 168.479.745.106,96 218.479.745.106,96 480.000.000.000,00

Pre-Money Valuation at t=0 Post-Money Valuation at t=0 Post-Money Valuation at t=3

b. Calculate the composition of ownership and number of shares
after PT. Pastiventura joins the business.
Investment

r = 30%
VC Investment 50.000.000.000,00 109.850.000.000,00
r = 30%
Startup Valuation 168.479.745.106,96 218.479.745.106,96 480.000.000.000,00

VC Ownership (t=3)
= 109.850.000.000,00 / 480.000.000.000,00
= 22,89%
VC Ownership (t=0) FV = PV (1+r)^n
= 50.000.000.000,00 / 218.479.745.106,96 480.000.000.000,00 = PV (1+30%)^3
= 22,89% PV = 218.479.745.106,96
b. Calculate the composition of ownership and number of shares
after PT. Pastiventura joins the business.

x Total Saham Perusahaan

22,89% =
10.000.000 + x
22,89% (10.000.000 + x) = x
2.289.000 + 22,89% x = x
2.289.000 = x - 22,89% x
Yang beredar (outstanding
share).
Saham Lama = 10.000.000
Saham Baru = 2.968.486
+
Total Saham = 12.968.486

2.289.000 = 77,11% x

x = 2.968.486
c. What is the expected increase of price per share from 2022 to
2025?
Pre-Money (t=0) Post-Money (t=0) Post-Money (t=5)

Value of Startup 168.479.745.106,96 218.479.745.106,96 480.000.000.000,00

Ownership : VC --- 22,89% 22,89%

Total Outstanding
10.000.000 12.968.486 12.968.486
Shares

Price Per Share 16.847,97 16.846,97 37.012,80

The increase of price per share

37.012 - 16.847 20.165
= = 119,70%
16.846 16.846
d. Assume everything happens precisely as calculated in 2026, and GTV multiple still remains.
Another new investor places an investment of Rp. 200 billion on your business in 2026, and
expects the required return of 30%. In the next three years (that is in 2029), what is the expected
GTV of your business? What is the new ownership composition?
Investment

r = 30%
VC Investment 200.000.000.000,00 439.400.000.000,00
r = 30%
Startup Valuation 168.479.745.106,96 218.479.745.106,96 480.000.000.000,00

VC Ownership (t=3)
= 439.400.000.000,00 / 480.000.000.000,00
= 91,54%
VC Ownership (t=0) FV = PV (1+r)^n
= 200.000.000.000,00 / 218.479.745.106,96 480.000.000.000,00 = PV (1+30%)^3
= 91,54% PV = 218.479.745.106,96