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  • Valuation Model Startup

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    Li Xian
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    This document provides a startup valuation model that calculates the implied pre-money valuation of a startup based on the targeted exit value, cost of capital, holding period, and amount of investment from venture capitalists (VCs). It shows an example where the targeted exit value is $50 million, the cost of capital is assumed to be 80%, the holding period is 5 years, and the VCs' investment is $500,000, resulting in an implied pre-money valuation of $2,146,107 and the VCs requiring 19% equity.

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    This document provides a startup valuation model that calculates the implied pre-money valuation of a startup based on the targeted exit value, cost of capital, holding period, and amount of investment from venture capitalists (VCs). It shows an example where the targeted exit value is $50 million, the cost of capital is assumed to be 80%, the holding period is 5 years, and the VCs' investment is $500,000, resulting in an implied pre-money valuation of $2,146,107 and the VCs requiring 19% equity.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    13 views2 pages

    Valuation Model Startup

    Uploaded by

    Li Xian
    This document provides a startup valuation model that calculates the implied pre-money valuation of a startup based on the targeted exit value, cost of capital, holding period, and amount of investment from venture capitalists (VCs). It shows an example where the targeted exit value is $50 million, the cost of capital is assumed to be 80%, the holding period is 5 years, and the VCs' investment is $500,000, resulting in an implied pre-money valuation of $2,146,107 and the VCs requiring 19% equity.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 2

    Startup Valuation Model 2018

    Exit value target 50,000,000


    80% Cost of capital (assumption)
    5.0 Holding period in years
    Exit present value 2,646,107
    VCs investments 500,000
    VCs required equity 19%
    Implied pre-money valuation 2,146,107

    Page 1 / 2
    Startup Valuation Model 2018

    Definition
    Exit value target is the value the startup will be sold in the future.
    Cost of capital is a ratio showing how risky is the company. For a SME, the ratio is normally around 4-5%. For a startup, it usually is between 50-80%
    Holding period is the period the VC is in the equity before the company is sold.
    Exit present value is the current value of the startup after the investment.
    VCs investments is the total amount that the startup is seeking and that the VCs are investing.
    VCs required equity is the amount of equity the VCs will hold after the investment.
    Implied pre-money valuation is the value of the company before the investment of the VCs.

    How to use the model


    1. Input the Exit value target.
    2. Input the holding period in years which depends of when you think you will sell.
    3. Input the cost of capital - if you don't know, put 80%
    4. Input the required investment.
    5. Play with the holding in years and the cost of capital to see how negotiations will impact the value of your startup.

    This file is provided by EZYcount, the easiest online accounting and invoicing tool.
    Find more at https://www.ezycount.ch

    Page 2 / 2

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