Subject: VCEF

Textbook Chapter 8

Summary

Valuation of new ventures

Issues with valuing new companies

• limited history
• few tangible assets
• uncertain future
• limited information of comparable company/deals (if even comparable)

VC funds have contractual agreements such as

• Max & Min investment per company
• Activity or Sector
• Geography
• Stage of company
• Target stake in venture
• Type of deal
• Time horizon (close of fund)
• Required return