Venture Financing:

Step-by-step Guide

Venture Valuation and Keeping Your Share

A Guide for Entrepreneurs

By Venture Planning Associates. Used by permission.

Business Valuation Model

The Business Valuation Model combines relative indicators for future performance with basic financial data (Revenue, Variable, and Fixed Costs) to value the business.

This valuation method can be used for business purchase, sale, or establishment. The model uniquely applies your intuitive business and market knowledge to provide a 3 year performance forecast and a business valuation.The model is compact and easy to use with minimal input requirements. ► $39  ► Click here!

Step-by-Step Guide To Venture Financing Venture Presentation Guidelines Start-up Business Plan: Executive Summary Start-up Business Plan Start-up Business Plan: Executive Summary Milestone Chart Cash Flow Forecast Management Team Start-up Business Plan Due Diligence Worksheet Investors Selection Criteria: Business Anagels and VC Firms Due Diligence: Study Areas Initial Screening: Company Assessment Worksheet Initial Screening: Company Assessment Worksheet Due Diligence Negotiating and Closing the Deal Valuation of a Start-up Company 1000ventures.com Legal Contract: Structuring the Deal Funding: Typical Terms of Preferred Stock Issued to Venture Capitalists Venture Financing Ten3 Business e-Coach: why, what, and how

When it comes to finding an investor for your venture why should 'FAIR SHARE' be an issue?

Problems arise when entrepreneurs, experts in their field, find themselves in unfamiliar territory, and easily intimidated by the financial 'expert' controlling the funding, and the financial future of the deal. Some deals fail to get off the ground because the investor wants an UNFAIR RETURN.

 

Others never see the light of day because the entrepreneur is unwilling to part with an appropriate share in EXCHANGE for INVESTMENT CAPITAL.

A SUCCESSFUL NEGOTIATION dictates that both parties walk away from the table as winners. How do you protect your interests and ensure that the deal you strike is fair for all concerned? The best way is to do your homework. Know as much or more about the true VALUE of YOUR DEAL as your PROSPECTIVE INVESTOR. By preparing a solid business plan that addresses everything an investor wants to know, you become an expert in his field.

 

Venture Financing

Complete "A to Z" Smart & Fast guide

Make your business attractive to investors!

► Understand the Venture Financing Chain

► Understand the requirements of Venture Capital Investors

► Follow unique Step-by-step Guide to Venture Financing

New-generation e-book + 40 slides ►

 

In the process, you will learn for yourself the fair asking price, as well as the best and worst case scenarios. At this stage, you are selling a FINANCIAL PACKAGE, not your product or service. It must be competitive in the marketplace in the areas of risk, return, liquidity and technical issues.

Here are the basics:

Develop Comprehensive Financial Data

  • Determine the funds required and their use, by back fitting the cash flow requirement of your business plan.

  • Decide on an EXIT STRATEGY for the investor and yourself.

    • Keep and Hold

    • Acquisition

    • Initial Public Offering (IPO)

Each requires different CASH MANAGEMENT STRATEGIES. Include a comprehensive pre and post investment VALUATION ANALYSIS for your business plan and exit strategy.

  • Develop a TERM SHEET or DEAL STRUCTURE based on the prospective investors’ required rates of return for the stage of your business.

 

 

Business Valuation Study

 

One of the most frequently used methods to evaluate risk and reward scenarios is the FIRST CHICAGO METHOD, which requires developing THREE FINANCIAL PLANS and assigning probabilities to the outcome of the plan.

1. Your plan is successful and goes public or gets acquired.

2. Your business is moderately successful (15% after taxes).

3. The business fails, and is liquidated.

Assign a realistic probability to each scenario, and calculate a COMPOSITE VALUE. Then calculate the AMOUNT of STOCK to be offered based for a required rate of return (e.g. 40%). Back-calculate how much of the business to sell.

Investment Plan

This is the document outlining in further detail the timetable of required equity and debt financing, and the payback, or liquidation, of the investor's position under various scenarios. This is where the 'DEAL' is structured to MAKE YOUR BUSINESS ATTRACTIVE to INVESTORS.

Venture Financing

Make your business attractive to investors! 

By being prepared, not only will you know what is fair, you will have the confidence to stand up to those who would gladly demand, and get, more than you should give them in order to be successful. An important aspect of all fund raising is to consider the effects of DILUTION and RATES of RETURN for MULTIPLE ROUNDS of FUNDING.

 

Templates for Net Present Value and IRR

Investment-Calc provides all the "financial models" you need to calculate the NPV/ROIC and IRR of business investments, and provides calculators to work out the present value of future receivables or payables, and the PV of future cash flows. ►   $125  ► Click here!

 

QuickValue PRO 3.0  

 US$ 99  ► Click here

  • Calculates the present value of any investment project or company share based on forecast cash flows and income proformas or actual data.

  • Quick valuation of any project or business, or option using cash flow forecasting, black-scholes formula or earnings forecasts.

  • Provides five, ten, fifteen and twenty year value basis, share value and net worth.

 

Funding PRO

Funding PRO is for executives, business owners, accountants and venture capital firms who want to develop detailed financial plans for any ten year period using Excel to develop best case, forecast case and worst case scenarios.

Funding Plan PRO can also be used as a quick financial modeller for any business.  ►  US$99  ►  Buy now

 

 
 

 

 

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