Venture Valuation: Introduciton

Question 1

Which kinds of valuation methods are discussed in the lecture?

Answer 1

• Generic approaches:
  
  • discounted cash flow valuation
  • Market valuation: comparable companies / transactions
• Context-specific approaches
  
  • venture capital method
  • rule of ratios

Question 2

What is the difference between value and price?

Answer 2

Value: determined by the benefits for the owner
Price: sum of money that is exchanged between buyer and seller

Question 3

What are the requirements for new venture valuation?

Answer 3

• Forward looking
• Realistic portrayal
  
  • flexibility
  • downside risk & upside potential
• User friendliness
  
  • data availability & reliability
  • complexity & transparency
• Acceptance