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From the Inside Flap
Imagine selling $2 million "worth" of Google stock and only receiving $50 in return? This scenario happens every day for venture-backed companies. Failure to quickly understand high-growth company valuation can cost trillions of dollars. Yet very few leaders involved in a venture-backed company have a definitive understanding of how valuation techniques are being applied to their financial statements and the decision-making process. Featuring extensive case studies of high-profile corporations, including Facebook, Twitter, and Microsoft, Venture Capital Valuation provides the knowledge and techniques necessary to understand and value high-growth companies.
Sharing his twenty-year track record helping thousands of investors, practitioners, and entrepreneurs measure and realize high-growth venture, author Lorenzo Carver draws on real-world cases from investors, founders, and advisors to illustrate how each corporation was impacted by valuations. By putting these techniques into a context and framework, Venture Capital Valuation simplifies them so that anyone founding, running, and investing in these innovative companies can apply them immediately.
Featuring a companion website where readers can access and download additional case study material, as well as different valuation materials mentioned throughout the text, Venture Capital Valuation explores:
Why what you don't know about valuation will cost you money
How VCs, angels, founders, and employees give up investment cash flow every day
Facebook at $80 billion valuation versus Enron at $80 billion valuation
Deal terms, waterfalls, and the pre-money myth
Whether venture-backed companies should even consider a discounted cash flow (DCF) model
Separating enterprise value from the allocation of that value
Valuing total equity
Using Future Value (FV) and Present Value (PV) to value future cash flows today
Why applying the typical DCF model to a venture-backed company hardly ever works
"Enterprise Value" + "Allocation Methods" = Value Destruction
Undervaluing companies and overvaluing employee options
Why you should D.O.W.T. (doubt) venture capital returns
409A valuation professionals discussing topic 820 (FAS 157) with VC CFOs
An invaluable resource for anyone who wants to make the most out of their investments, Venture Capital Valuation shows business appraisers and venture capitalists how to maximize their returns and avoid losing money—before the damage becomes irreparable
About the Author
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.
I've read this book twice in the past year - excellent reference work that goes into the details of how to value a company and why valuations are often misunderstood or plain wrong. If in negotiations with a VC or when raising financing, this book is an absolute must. I'm an entrepreneur who has been "through the war" and this book has been extremely helpful for me. Being able to master the principles in this book will ensure that you are prepared to negotiate or position for better value.
One of the greatest values of the book was to read of the pitfalls (of which I've been part) that could easily be avoided by simple means - things that would have saved me $$ millions.
Absolutely focused on highly specialized valuation techniques (Black Scholes, Real Options). If it your first approach to the subject you better start with a more introductory alternative book. This book is centered in discussing not the main concepts of valuation but the technicalities that make some methodologies better than other.
Product Details :
- Series: Wiley Finance (Book 631)
- Hardcover: 288 pages
- Publisher: Wiley; 1 edition (December 27, 2011)
- Language: English
- ISBN-10: 0470908289
- ISBN-13: 978-0470908280
- Product Dimensions: 1 x 6.3 x 9.2 inches
More Details about Venture Capital Valuation, + Website: Case Studies and Methodology (Wiley Finance), 1st Edition
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