분야
pdfVenture Financing
Dr. David Y Choi
Why should I care about this session?
If you are a VC already
If you might want to be an investor?
If you are an entrepreneur
If you might become an entrepreneur
If you are going to be an executive in a growing company
If you might acquire a smaller company
To learn about trends: Learning about VC investment is useful
To learn about financing -one of the most important areas in business
Typical Process
Review Business Pitch
Initial Meeting
Follow-on Meeting
-Detailed Discussion
-Valuation
Evaluation
Concept, Team, Financials
Term Sheet
Negotiation
Due Diligence
Closing
Screening
Evaluation
May include:
formal market studies
reference checks
consultation with third
parties
May adjust valuation,
amounts, and other
terms
Signed
Money is wired
The investor outlines
basic contract terms
and discusses pricing.
More Negotiation
& Evaluation
Valuation
Why?
How?
Algebra
How much equity entrepreneur will give up for cash
How much equity investor will receive for investment
Comparables
Discounted Cash Flow
Need for Return
Desperation/Eagerness
Economic climate
Pre-Money Valuation + Cash Investments = Post-Money
Valuation
But can get more complicated
Terminology
Pre-Money
Valuation
Post-Money
Valuation
Is equal to the price paid per share in the financing round multiplied
by the number of shares outstanding before the financial event
Is equal to the price paid per share in the financing round multiplied
by the number of shares outstanding after the financial event
Basic Calculation #1
Most Basic Algebra
Suppose you need $1M.
Your company ’s pre-money valuation is $2M.
Post-money valuation would then be $3M.
You can get $1M and maintain 66.66% and give up 33.33%.
