Tutorial 3.1: Venture Capital | Method

Question 1

Venture Capital Method– What has to be considered in each of the following steps?

1. Future Value calculation
2. Present value calculation (pre & post money)
3. VC share of ownership calculation
4. Future dilution compensation

Answer 1

1. DCF Valuation, Multiple valuation
2. Discounting appropriately, Pre vs Post-money
3. Investment sum/PV of company
4. Take into account future issuances of shares

Question 2

▪ Dilution is the …

Retention Rate (RET)
▪ Measurement for the …
▪ Remaining share of the old investor
after taking account of …
▪ In case of no dilution takes place: RET = 1

Answer 2

reduction of share of ownership due to issuance of new shares

dilution of the investor
future dilution instances