Venture Capital Method

The venture capital method (VC Method) is one of the most used valuation methods in the venture capital industry. This chapter starts with identifying the reasons behind why venture capital method is so widely adopted. This chapter discussed the venture capital method, along with a case. Some of the critical elements in venture capital method are deciding the quantity of investment, estimating the exit value, calculating the target multiple of the money, valuing the portion held by the VC in the startup, incorporating fund management and carried interest into the valuation, valuing the interested of general partner vs limited partners and deciding on the investment. This chapter touches are the above points and more.