Valuations of Start-ups (X)



1)     Venture Capital: the basics

Definition of VC and start-up
What do we really invest in?
The fundamental questions when analysing start-ups at a very early-stage
What about the financials?

2)     Enterprise Valuation

Roles of Valuation
The Classical Theory: Discounted Cash Flows or Net Present Value
The Modern Methods for developed businesses: the Multiple approach

3)     Start-up Valuation

Living in a world where financial methods don’t work
The key principles to never forget
The seed case: when only ideas are on the table
The central case: when sales rocket but profitability is still unseen
Forward thinking: what could we expect as an exit value? Role in the present valuation assessment
The main risk of using the Price to Sales ratio
How to modify a valuation over time: the idea of sharing value depending on exit price
                                                               i.      Preferred Shares

                                                             ii.      Options for the investors

                                                           iii.      Options for the founders & employees

Follow-on rounds and impacts on valuation, proceeds waterfall etc.
Investment Processes in VC

4)     Risk Management: the portfolio and the partnership approach

Why should an investor always consider a portfolio rather than a single (or very limited number of) investment?
What should an investor look in a partnership?
Investment strategy and portfolio management
Examples of strategies and impact on the performance
Decision making process and managers compensation


Material for this course will be given directly by the professor through a dropbox link.