{"product_id":"valuing-early-stage-and-venture-backed-companies-isbn-9780470436295","title":"Valuing Early Stage and Venture-Backed Companies","description":"\u003cp\u003e\u003cb\u003eValuing Early Stage and Venture-Backed Companies\u003c\/b\u003e  \u003c\/p\u003e\u003cp\u003eUnique in the overall sphere of business valuation, the valuing of early stage and venture-backed companies lacks the traditional metrics of cash flow, earnings, or even revenue at times. But without these metrics, traditional discounted cash flow models and comparison to public markets or private transactions take on less relevance, calling for a more \"experiential\" valuation approach. \u003c\/p\u003e\u003cp\u003eIn a straightforward, no-nonsense manner, the mystique surrounding the valuation of early stage and venture-backed companies is now unveiled. With an emphasis on applications and models, \u003ci\u003eValuing Early Stage and Venture-Backed Companies\u003c\/i\u003e shows the most effective way for your company to prepare and present its valuations. \u003c\/p\u003e\u003cp\u003eFeaturing contributed chapters by a panel of top valuation experts, this book dispels improper valuation techniques promulgated by unknowing business appraisers and answers your key questions about valuation theory and which tools you need to successfully apply in your specific situation. \u003c\/p\u003e\u003cp\u003eHere, you'll find out more about various valuation techniques, including: \u003c\/p\u003e\u003cul\u003e \u003cli\u003e\"Back solving\" valuation\u003c\/li\u003e \u003cli\u003eModified cost approach\u003c\/li\u003e \u003cli\u003eOption pricing model\u003c\/li\u003e \u003cli\u003eProbability-weighted expected returns model\u003c\/li\u003e \u003cli\u003eAsian puts\u003c\/li\u003e \u003cli\u003e New data on discounts for lack of marketability\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eDetailed and hands-on, \u003ci\u003eValuing Early Stage and Venture-Backed Companies\u003c\/i\u003e equips you with broad foundational data on the venture capital industry, as well as in-depth analyses of distinct early stage company valuation approaches. \u003c\/p\u003e\u003cp\u003ePerforming valuations for your early stage company requires an understanding of the special circumstances faced by your organization. With ample examples of generally accepted allocation models with complex capital structures common to early stage companies, \u003ci\u003eValuing Early Stage and Venture-Backed Companies\u003c\/i\u003e mixes real-life experience with deep technical expertise to equip you with the complete, user-friendly resource you'll turn to often in valuing your early stage or venture-backed company. \u003c\/p\u003e\u003cp\u003ePreface ix\u003c\/p\u003e \u003cp\u003eAcknowledgments xi\u003c\/p\u003e \u003cp\u003eAbout the Author xiii\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 1 Laying the Foundation 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eA Unique Landscape 1\u003c\/p\u003e \u003cp\u003eAn Overview of the Venture Capital Industry 8\u003c\/p\u003e \u003cp\u003eConclusion 14\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 2 Understanding Early Stage Preferred Stock Rights 17\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStock Rights 19\u003c\/p\u003e \u003cp\u003eContractual Rights 28\u003c\/p\u003e \u003cp\u003eConclusion 32\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 3 Enterprise Valuation Approaches 35\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRelevancy of Traditional Valuation Approaches 35\u003c\/p\u003e \u003cp\u003eCost Approach 40\u003c\/p\u003e \u003cp\u003eMarket Approach 43\u003c\/p\u003e \u003cp\u003eIncome Approach 45\u003c\/p\u003e \u003cp\u003e“Vectoring” Valuation Approach 46\u003c\/p\u003e \u003cp\u003eThe Income Approach as an Oxymoron 53\u003c\/p\u003e \u003cp\u003eConclusion 58\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 4 Application of the Option-Pricing Method in Allocating Enterprise Value 59\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eImportant Assumptions Underlying the Option-Pricing Model 61\u003c\/p\u003e \u003cp\u003eOption-Pricing Method Steps in Application 66\u003c\/p\u003e \u003cp\u003eOther Considerations in the Option-Pricing Method 86\u003c\/p\u003e \u003cp\u003ePros and Cons of the Option-Pricing Model 87\u003c\/p\u003e \u003cp\u003eConclusion 88\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 5 Application of the Probability-Weighted Expected Returns Method in Allocating Enterprise Value 89\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIllustration of the PWERM 90\u003c\/p\u003e \u003cp\u003ePWERM Critical Assumptions 94\u003c\/p\u003e \u003cp\u003eOverview of Stock Rights 96\u003c\/p\u003e \u003cp\u003eIdentification of Outcomes 98\u003c\/p\u003e \u003cp\u003eUpdating PWERM Analyses 104\u003c\/p\u003e \u003cp\u003eConclusion 105\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 6 Applicable Discounts for Early Stage Companies 107\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBasis of Discounts 108\u003c\/p\u003e \u003cp\u003eSuggested “Corrections” to the Current Use of Put Models for Quantifying DLOMs 114\u003c\/p\u003e \u003cp\u003eDilution Discount 119\u003c\/p\u003e \u003cp\u003eThe Likelihood of Liquidity 120\u003c\/p\u003e \u003cp\u003eConclusion 123\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 7 Advanced Valuation Topics for Early Stage Companies 125\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUtilizing the OPM as a “Valuation” Methodology 127\u003c\/p\u003e \u003cp\u003eSequential and Compound Options 127\u003c\/p\u003e \u003cp\u003eAllocating the Residual Value 131\u003c\/p\u003e \u003cp\u003eFurther Extensions for Compound Options 137\u003c\/p\u003e \u003cp\u003eVenture Capital Rates of Return 139\u003c\/p\u003e \u003cp\u003eExecutive Stock Compensation 143\u003c\/p\u003e \u003cp\u003eConclusion 143\u003c\/p\u003e \u003cp\u003eAPPENDIX A Allocation of Enterprise Value Using the Option-Pricing Method: Treatment of Derivatives on Common Stock 145\u003c\/p\u003e \u003cp\u003eAPPENDIX B Volatility in the Option-Pricing Model 155\u003c\/p\u003e \u003cp\u003eNotes 175\u003c\/p\u003e \u003cp\u003eIndex 179\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eNEIL J. BEATON, CPA\/ABV, CFA, ASA,\u003c\/b\u003e is a nationally known business valuation expert and speaker on the valuation of early stage companies. He is the National Partner in Charge of Valuation Services for Grant Thornton, LLP, an international audit, tax, and financial advisory services firm. He has more than twenty-seven years of professional experience and is a recognized expert witness in state and federal courts as well as international tribunals. He has authored an AICPA publication on valuing stock options and intangible assets for financial reporting purposes.   Unique in the overall sphere of business valuation, the valuing of early stage and venture-backed companies lacks the traditional metrics of cash flow, earnings, or even revenue at times. But without these metrics, traditional discounted cash flow models and comparison to public markets or private transactions take on less relevance, calling for a more \"experiential\" valuation approach.  \u003c\/p\u003e\u003cp\u003eIn a straightforward, no-nonsense manner, the mystique surrounding the valuation of early stage and venture-backed companies is now unveiled. With an emphasis on applications and models, \u003ci\u003eValuing Early Stage and Venture-Backed Companies\u003c\/i\u003e shows the most effective way for your company to prepare and present its valuations.\u003c\/p\u003e \u003cp\u003eFeaturing contributed chapters by a panel of top valuation experts, this book dispels improper valuation techniques promulgated by unknowing business appraisers and answers your key questions about valuation theory and which tools you need to successfully apply in your specific situation.\u003c\/p\u003e \u003cp\u003eHere, you'll find out more about various valuation techniques, including:\u003c\/p\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003e\"Back solving\" valuation\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eModified cost approach\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eOption pricing model\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eProbability-weighted expected returns model\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eAsian puts\u003c\/p\u003e \u003c\/li\u003e \u003cli\u003e \u003cp\u003eNew data on discounts for lack of marketability\u003c\/p\u003e \u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eDetailed and hands-on, \u003ci\u003eValuing Early Stage and Venture-Backed Companies\u003c\/i\u003e equips you with broad foundational data on the venture capital industry, as well as in-depth analyses of distinct early stage company valuation approaches.\u003c\/p\u003e \u003cp\u003ePerforming valuations for your early stage company requires an understanding of the special circumstances faced by your organization. With ample examples of generally accepted allocation models with complex capital structures common to early stage companies, Valuing \u003ci\u003eEarly Stage and Venture-Backed Companies\u003c\/i\u003e mixes real-life experience with deep technical expertise to equip you with the complete, user-friendly resource you'll turn to often in valuing your early stage or venture-backed company.\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eValuing Early Stage and Venture-Backed Companies\u003c\/b\u003e  \u003c\/p\u003e\u003cp\u003eUnique in the overall sphere of business valuation, the valuing of early stage and venture-backed companies lacks the traditional metrics of cash flow, earnings, or even revenue at times. But without these metrics, traditional discounted cash flow models and comparison to public markets or private transactions take on less relevance, calling for a more \"experiential\" valuation approach. \u003c\/p\u003e\u003cp\u003eIn a straightforward, no-nonsense manner, the mystique surrounding the valuation of early stage and venture-backed companies is now unveiled. With an emphasis on applications and models, \u003ci\u003eValuing Early Stage and Venture-Backed Companies\u003c\/i\u003e shows the most effective way for your company to prepare and present its valuations. \u003c\/p\u003e\u003cp\u003eFeaturing contributed chapters by a panel of top valuation experts, this book dispels improper valuation techniques promulgated by unknowing business appraisers and answers your key questions about valuation theory and which tools you need to successfully apply in your specific situation. \u003c\/p\u003e\u003cp\u003eHere, you'll find out more about various valuation techniques, including: \u003c\/p\u003e\u003cul\u003e \u003cli\u003e\"Back solving\" valuation\u003c\/li\u003e \u003cli\u003eModified cost approach\u003c\/li\u003e \u003cli\u003eOption pricing model\u003c\/li\u003e \u003cli\u003eProbability-weighted expected returns model\u003c\/li\u003e \u003cli\u003eAsian puts\u003c\/li\u003e \u003cli\u003e New data on discounts for lack of marketability\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eDetailed and hands-on, \u003ci\u003eValuing Early Stage and Venture-Backed Companies\u003c\/i\u003e equips you with broad foundational data on the venture capital industry, as well as in-depth analyses of distinct early stage company valuation approaches. \u003c\/p\u003e\u003cp\u003ePerforming valuations for your early stage company requires an understanding of the special circumstances faced by your organization. With ample examples of generally accepted allocation models with complex capital structures common to early stage companies, \u003ci\u003eValuing Early Stage and Venture-Backed Companies\u003c\/i\u003e mixes real-life experience with deep technical expertise to equip you with the complete, user-friendly resource you'll turn to often in valuing your early stage or venture-backed company.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990446325989,"sku":"NP9780470436295","price":115.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780470436295.jpg?v=1761787865","url":"https:\/\/k12savings.com\/es\/products\/valuing-early-stage-and-venture-backed-companies-isbn-9780470436295","provider":"K12savings","version":"1.0","type":"link"}