Valuations of Start-ups (X)

Plan

1. Venture Capital: the basics
   • Definition of VC and start-up
   • What do we really invest in?
   • The fundamental questions when analysing start-ups at a very early-stage
   • What about the financials?
2. Enterprise Valuation
   • Definitions
   • Roles of Valuation
   • The Classical Theory: Discounted Cash Flows or Net Present Value
   • The Modern Methods for developed businesses: the Multiple approach
3. Start-up Valuation
   • Living in a world where financial methods don’t work
   • The key principles to never forget
   • The seed case: when only ideas are on the table
   • The central case: when sales rocket but profitability is still unseen
   • Forward thinking: what could we expect as an exit value? Role in the present valuation assessment
   • The main risk of using the Price to Sales ratio
   • How to modify a valuation over time: the idea of sharing value depending on exit price  
     1. Preferred Share
     2. Options for the investors
     3. Options for the founders & employees
   • Follow-on rounds and impacts on valuation, proceeds waterfall etc.
   • Investment Processes in VC
4. Risk Management: the portfolio and the partnership approach
   • Why should an investor always consider a portfolio rather than a single (or very limited number of) investment?
   • What should an investor look in a partnership?
   • Investment strategy and portfolio management
   • Examples of strategies and impact on the performance
   • Decision making process and managers compensation

Références

Material for this course will be given directly by the professor through a dropbox link.

Room : PC 11 (Ecole polytechnique)