1 / 23

Business Plan Preparation

Business Plan Preparation. Frank Moyes Leeds School of Business University of Colorado Boulder, Colorado. Seed 80%+ Start-Up 60% Early Stage 50% Second Stage 40% Third Stage 30% Bridge 25%. 19x 10x 8x 5x 4x 3x. 0. Required Return on Investment.

nitza
Download Presentation

Business Plan Preparation

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Business Plan Preparation Frank MoyesLeeds School of BusinessUniversity of ColoradoBoulder, Colorado Venture Capital Method of Valuation

  2. Seed 80%+ Start-Up 60% Early Stage 50% Second Stage 40% Third Stage 30% Bridge 25% 19x 10x 8x 5x 4x 3x 0 Required Return on Investment 5 yr. Increase IRR Bygraves & Zacharakis Venture Capital Method of Valuation

  3. Venture Capital Method Key Assumptions • Net Profit • Valuation Multiple • Price/Earnings • Price/Revenue • Price/EBITDA • Price/Seller’s Discretionary Earnings • Investor IRR Venture Capital Method of Valuation

  4. Venture Capital MethodMountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Venture Capital Method of Valuation

  5. Venture Capital MethodMountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value ? Venture Capital Method of Valuation

  6. Venture Capital MethodMountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million Venture Capital Method of Valuation

  7. Venture Capital MethodMountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company Value $30 million Required IRR ? Required Increase Required $ value Venture Capital Method of Valuation

  8. Venture Capital MethodMountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million Required IRR 60% Required Increase ? Required $ value Venture Capital Method of Valuation

  9. Venture Capital MethodMountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million Required IRR 60% Required Increase 10x Required $ value ? Venture Capital Method of Valuation

  10. Venture Capital MethodMountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million Required IRR 60% Required Increase 10x Required $ value $10 million % of company required ? Venture Capital Method of Valuation

  11. Venture Capital MethodMountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million Required IRR 60% Required Increase 10x Required $ value $10 million % of company required 33% Pre-money valuation ? Post-money valuation ? Venture Capital Method of Valuation

  12. Venture Capital MethodMountain Unicycles Investment $1 million Exit year 5th year Revenue $20 million Net profit (10%) $2 million Growth Rate 20% P/E multiple 15x Company value $30 million Required IRR 60% Required Increase 10x Required $ value $10 million % of company required 33% Pre-money valuation $2 million Post-money valuation $3 million Venture Capital Method of Valuation

  13. Venture Capital MethodMountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $ 2 million Growth Rate 20% 30% P/E multiple 15x ? Company value $30 million ? Required IRR 60% ? Required Increase 10x ? Required $ value $10 million ? % of company required 33% ? Pre-money valuation $2 million ? Post-money valuation $3 million ? Venture Capital Method of Valuation

  14. Venture Capital MethodMountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $ 2 million Growth Rate 20% 30% P/E multiple 15x 20x Company value $30 million ? Required IRR 60% ? Required Increase 10x ? Required $ value $10 million % of company required 33% Pre-money valuation $2 million Post-money valuation $3 million Venture Capital Method of Valuation

  15. Venture Capital MethodMountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $ 2 million Growth Rate 20% 30% P/E multiple 15x 20x Company value $30 million $40 million Required IRR 60% ? Required Increase 10x ? Required $ value $10 million ? % of company required 33% ? Pre-money valuation $2 million Post-money valuation $3 million Venture Capital Method of Valuation

  16. Venture Capital MethodMountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $ 2 million Growth Rate 20% 30% P/E multiple 15x 20x Company value $30 million $40 million Required IRR 60% 60% Required Increase 10x 10x Required $ value $10 million $10 million % of company required 33% 25% Pre-money valuation $2 million ? Post-money valuation $3 million ? Venture Capital Method of Valuation

  17. Venture Capital MethodMountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $ 2 million Growth Rate 20% 30% P/E multiple 15x 20x Company value $30 million $40 million Required IRR 60% 60% Required Increase 10x 10x Required $ value $10 million $10 million % of company required 33% 25% Pre-money valuation $2 million $3 million Post-money valuation $3 million $4 million Venture Capital Method of Valuation

  18. Venture Capital MethodMountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $1 million Growth Rate 20% 10% P/E multiple 15x ? Company value $30 million Required IRR 60% Required Increase 10x Required $ value $10 million % of company required 33% Pre-money valuation $2 million Post-money valuation $3 million Venture Capital Method of Valuation

  19. Venture Capital MethodMountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $1 million Growth Rate 20% 10% P/E multiple 15x 10x Company value $30 million ? Required IRR 60% Required Increase 10x Required $ value $10 million % of company required 33% Pre-money valuation $2 million Post-money valuation $3 million Venture Capital Method of Valuation

  20. Venture Capital MethodMountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $1 million Growth Rate 20% 10% P/E multiple 15x 10x Company value $30 million $10 million Required IRR 60% ? Required Increase 10x ? Required $ value $10 million ? % of company required 33% Pre-money valuation $2 million Post-money valuation $3 million Venture Capital Method of Valuation

  21. Venture Capital MethodMountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $1 million Growth Rate 20% 10% P/E multiple 15x 10x Company value $30 million $10 million Required IRR 60% 60% Required Increase 10x 10x Required $ value $10 million $10 million % of company required 33% ? Pre-money valuation $2 million ? Post-money valuation $3 million ? Venture Capital Method of Valuation

  22. Venture Capital MethodMountain Unicycles Investment $1 million $1 million Exit year 5th year 5th year Revenue $20 million $20 million Net profit (10%) $2 million $1 million Growth Rate 20% 10% P/E multiple 15x 10x Company value $30 million $10 million Required IRR 60% 60% Required Increase 10x 10x Required $ value $10 million $10 million % of company required 33% 100% Pre-money valuation $2 million ?! Post-money valuation $3 million ?! Venture Capital Method of Valuation

  23. Venture Capital Method Key Assumptions • Net Profit • P/E Multiple • Investor IRR Venture Capital Method of Valuation

More Related