Business Valuation - VC Method

A Business valuation tool - VC Method in Microsoft Excel.

by Almax Partners
Practical advisory and financial modelling for start ups, established businesses and projects.Follow

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Description
This is a quick tool to help you value your business start up.

There are many ways to put a value on your business - the VC method is useful to understand how a VC would quickly value your business and it will give you an indication of your pre (and post) money valuation. This is an industry-standard method and as a founder, it is important to understand the mechanisms and drivers. This analysis builds a valuation based on the expected investment horizon, future valuation and required return of the investor.

**This analysis tool will enable you to identify and test:**

👍 Your Pre and post-money valuation

👍 Your capital structure pre and post-investment

👍 The number of shares to issue to your investor and implied share price

👍 The dilution of current shareholders after investment

**Functionality**

⚙ Test assumptions and sensitivities by building five scenarios (assess the impact on valuation)

⚙ Clear colour coding and formatting to allow traceability

⚙ Detailed guidance and definition of each input and output


**The workbook is made up of:**

1/ Introduction - clear instruction on how to use the model

2/ Business Valuation - where you input, test scenarios and calculate your valuation

Pre-requisites - to get the most from this analysis, it is important that you have an idea of your forecast operating profit in your exit year and also an exit multiple. The VC will identify similar companies, in sector and stage, as the investment opportunity.

This Best Practice includes
1 Excel tool to calculate your start up valuation