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VC Valuation Method Example
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Example Calculation
Financial Projections
Unit20232024202520262027202820292030
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Cash Flow Date
31-Dec-2331-Dec-2431-Dec-2531-Dec-2631-Dec-2731-Dec-2831-Dec-2931-Dec-30
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Forecast YearYear 0Year 1Year 2Year 3Year 4Year 5Year 6Year 7
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Assumptions
VC Valuation
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Scenario#1RevenueUSD - - - - - - 10,000,000
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EV/Revenue Multiple
x - - - - - - 10.0x
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Valuation Assumptions
Enterprise Value (EV)
USD - - - - - - 100,000,000
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CurrencyUSD
- Financial Debt
USD - - - - - - -
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Valuation DateDate31-Dec-23+ CashUSD - - - - - - -
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Exit YearYear7Equity ValueUSD - - - - - - 100,000,000
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Revenue in Year 7USD10,000,000
Discount Period
Years1.002.003.004.005.006.007.00
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EV/Revenue Multiplex10.0x
Discount Rate
%25.0%25.0%25.0%25.0%25.0%25.0%25.0%
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Financial Debt in Year 7USD0
Discount Factor
x0.800.640.510.410.330.260.21
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Cash in Year 7USD0
Present Value
USD - - - - - - 20,971,520
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Required Return%25.0%
Equity Value Today
USD 20,971,520
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Investor Assumptions
Investor Calculation
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Equity Stake at Entry% Equity 10.0%
Company Equity Value
USD - - - - - - 100,000,000
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Dilution Effect% Equity 0.0%
Equity Stake
% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
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Equity Stake at Exit% Equity 10.0%
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Investor Cash Flows
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InvestmentUSD (2,097,152)
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Exit Proceeds
USD - - - - - - - 10,000,000
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Investor Cash Flows
USD (2,097,152) - - - - - - 10,000,000
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Investor IRR
%25.0%
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Cash on Cash Multiple
X4.8x
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