Lorenzo Carver

Venture Capital Valuation, + Website

Case Studies and Methodology

• Gebundenes Buch

Produktbeschreibung

Very few of the decision makers involved in a venture backed company have a definitive understanding of how valuation techniques are being applied to their financial statements and their decision making process. This casebook provides a quick and accurate road map on how valuation techniques used for tax, financial reporting and deal structure impact a company's past, present and future. The book includes real world case studies to simplify this complex subject for the practitioners serving companies, the founders and executives running the companies, and the investors that fund the companies.

Produktdetails

• Wiley Finance Editions
• Verlag: Wiley & Sons
• Artikelnr. des Verlages: 14590828000
• 1. Auflage
• Seitenzahl: 288
• Erscheinungstermin: 27. Dezember 2011
• Englisch
• Abmessung: 235mm x 157mm x 20mm
• Gewicht: 470g
• ISBN-13: 9780470908280
• ISBN-10: 0470908289
• Artikelnr.: 32815084

Autorenporträt

LORENZO CARVER, MS, MBA, CVA, CPA, is CEO of Liquid Scenarios, a technology-based financial business intelligence solution company that provides services to investors, practitioners, entrepreneurs, and academics on how to measure and realize high-growth venture value. Carver has a twenty-year track record of helping thousands of clients understand how to measure and realize high-growth venture value. He is the author and developer of BallPark Business Valuation, the #1 selling, award-winning small-business valuation solution software covered by Bloomberg Businessweek, Entrepreneur, CPA Software News, The Kim Komando Show, and business journals worldwide.

Inhaltsangabe

Acknowledgments ix Introduction What You Don't Know About Valuation Will
Cost You Money 1 Chapter 1 Using Facebook, Twitter, and LinkedIn to Explain
VC Valuation Gains and Losses: How VCs, Angels, Founders, and Employees
Give Up Investment Cash Flow Every Day 13 Did Valuation Ignorance Cost
ConnectU (and the Winklevosses) $50MM? 14 An Expert Doesn't Need a 409A
Valuation When He or She Has a Certificate and Basic Math 15 Valuing
Facebook's Common Stock Compared to Preferred Stock in Minutes 16 What the
Winklevosses Would Have Seen in Any 409A Valuation Report 19 Deriving a
Discount for Lack of Marketability for Valuations 27 Facebook at $80
Billion Valuation versus Enron at $80 Billion Valuation 35 Deal Terms,
Waterfalls, and the Pre-Money Myth 36 The Pre-Money Myth 44 Summary 56
Chapter 2 Should Venture-Backed Companies Even Consider a DCF Model?:
Introducing the Life Science Valuation Case: Zogenix 57 Zogenix: Company
Background Summary and Highlights 58 Leaping Forward Just 20 Months, the
Company Files for an IPO 64 Order of Valuations Presented in This Case 67
Chapter 3 Valuation Methods versus Allocation Methods Regarding Zogenix 69
Separating Enterprise Value from the Allocation of That Value 69 Valuing
Total Equity 72 Using Future Value (FV) and Present Value (PV) to Value
Future Cash Flows Today 79 Summary 82 Chapter 4 Applying the Typical DCF
Model to a Venture-Backed Company Hardly Ever Works 85 The Gordon Growth
Model 85 High Growth Limits the Gordon Growth Model 87 Dividend Irrelevance
and Capital Structure Irrelevance 90 Using Comparables (Generally Market
Multiples) to Generate a Terminal Value 91 Actual Differences between
Angels and VCs versus Perceived Differences 100 Applying Valuation Methods
and Allocation Methods at Inception 102 Summary 104 Chapter 5 "Enterprise
Value" + "Allocation Methods" = Value Destruction: Undervaluing Companies
and Overvaluing Employee Options 107 Most 409A Valuations Undervalue the
Company and Simultaneously Overvalue Employee Stock Options 107 Did
Auditors Drive Valuators to Overvalue Employee Stock Options? 109 Most 409A
Enterprise Value Calculations Ignore the "Takeover" Value of Preferred 113
The Realistic Range of Possibilities Depends on Who the Investors Are 119
Overstating Returns and Understating Returns on the Same Asset
(Simultaneously) 125 What Happens to Fund IRRs When You Assume Book Value
Equals Market Value? 128 The Real Cost of Fair Value, Fair Market Value,
and Enterprise Value 132 Yahoo! Case 137 Chapter 6 Why You Should D.O.W.T.
(Doubt) Venture Capital Returns--Option Pool Reserve 159 Unissued Option
Pools 159 Value Conclusion Elements Impacted by Option Pool Reserve
Assumptions 161 Impact on Parties Relying on Assumptions of VC Investments
176 Chapter 7 If Valuation Can't Make You Money, Do You Really Need It?:
Learning Practical Applications from Kayak.com 183 Applying Studies to
Real-World Cases 186 Important Questions to Ask 213 Summary 223 Chapter 8
Don't Hate the Appraiser (Blame the Auditor Instead) 225 Interview with
Jeff Faust, AVA 226 Summary 236 Chapter 9 Don't Blame the Auditors (Blame
the Practice Aid Instead): 409A Valuation Professionals Discussing Topic
820 (FAS 157) with VC CFOs 237 Introduction to the Expert Panelists 238 The
Auditor's Valuation "Bible" 239 SAS101 Tests, PWERMS, and OPMs 240 PWERMS
and rNPV/eNPV Models 243 Subjectivity and the PWERM (or "Power") Method 243
Finding Inputs for the OPM Model 245 Enterprise Values versus Allocations
246 Next Round Pricing and Topic 820 248 Different Ways of Treating
Granted, Unvested, and Reserved Options 250 Valuing Warrants in
Venture-Backed Companies 252 Quantifying Qualitative Inputs to Value
Conclusions for VC-Funded Companies 253 Discounts for Lack of Marketability
(DLOM) and Venture-Fund Portfolios 254 Sharespost, SecondMarket as Market
Inputs 258 Summary 262 Chapter 10 Now That You Understand Venture Capital
Valuation, Share It 263 About the Author 269 Index 271