| A | B | C | D | E | F | G | H | I | |
|---|---|---|---|---|---|---|---|---|---|
1 | Venture Capital Method with Sensitivity Analysis | (?) | |||||||
2 | vcmethod.com | ||||||||
3 | |||||||||
4 | Single period NPV method | Base Model | Variation 1 | Variation 2 | Variation 3 | Variation 4 | Variation 5 | ||
5 | Exit Value | 1 | V | $25,000,000 | $22,500,000 | $25,000,000 | $25,000,000 | $25,000,000 | $25,000,000 |
6 | Time to exit | 2 | t | 4 | 4 | 4.4 | 4 | 4 | 4 |
7 | Discount rate | 3 | r | 50% | 50% | 50% | 60% | 50% | 50% |
8 | Investment Amount | 4 | I | $3,000,000 | $3,000,000 | $3,000,000 | $3,000,000 | $3,300,000 | $3,000,000 |
9 | Number of existing shares | 5 | x | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 2,000,000 |
10 | Post-Money | 6 | POST | $4,938,272 | $4,444,444 | $4,198,928 | $3,814,697 | $4,938,272 | $4,938,272 |
11 | Pre-Money | 7 | PRE | $1,938,272 | $1,444,444 | $1,198,928 | $814,697 | $1,638,272 | $1,938,272 |
12 | Ownership fraction of investors | 8 | F | 60.75% | 67.50% | 71.45% | 78.64% | 66.83% | 60.75% |
13 | Ownership fraction of entrepreneurs | 1-F | 39.25% | 32.50% | 28.55% | 21.36% | 33.18% | 39.25% | |
14 | Number of new shares | 9 | y | 1,547,771 | 2,076,923 | 2,502,235 | 3,682,349 | 2,014,318 | 3,095,541 |
15 | Price per share | 10 | p | $1.94 | $1.44 | $1.20 | $0.81 | $1.64 | $0.97 |
16 | Final wealth of investors | $15,187,500 | $15,187,500 | $17,861,700 | $19,660,800 | $16,706,250 | $15,187,500 | ||
17 | Final wealth of entrepreneurs | $9,812,500 | $7,312,500 | $7,138,300 | $5,339,200 | $8,293,750 | $9,812,500 | ||
18 | NPV of investors' wealth | $3,000,000 | $3,000,000 | $3,000,000 | $3,000,000 | $3,300,000 | $3,000,000 | ||
19 | NPV of entrepreneurs' wealth | $1,938,272 | $1,444,444 | $1,198,928 | $814,697 | $1,638,272 | $1,938,272 | ||
20 | |||||||||
21 | Notes: | ||||||||
22 | 1 | Terminal Value (at time of exit) | |||||||
23 | 2 | Time to exit event | |||||||
24 | 3 | Discount return used by investors | |||||||
25 | 4 | Amount of investment | |||||||
26 | 5 | Number of existing shares (owned by the entrepreneurs) | |||||||
27 | 6 | Post-Money Valuation: POST = V/(1+r)^t | |||||||
28 | 7 | Pre-Money Valuation: PRE = POST - 1 | |||||||
29 | 8 | Required ownership fraction for the investor: F = I / POST | |||||||
30 | 9 | Number of shares the investors require to achieve their desired ownership fraction: y = x[F/(1-F)] | |||||||
31 | 10 | Price per share: p = I / y | |||||||
32 | V1.0 | ||||||||