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Description - Ready to Use Financial Models: Information Technology Venture Capital Valuations - Interactive Excel Spreadsheet Used by Top IT VCs by Praveen Gupta

"Venture Capital Valuations for Technology Companies" is an interactive Excel spreadsheet that features a user-friendly, step-by-step guide through a technology-focused valuation model. Developed by acclaimed venture capitalists Praveen Gupta of CDIB Ventures and Gerard Langeler of OVP Venture Partners, the financial models provide an unprecedented look into the world of technology centure Capital and the methodologies behind valuation. "Venture Capital Valuations for Technology Companies" features both an "ownership" and "financial ratios" worksheet, which provide color-coded in-depth directions for easy usage. Desired Ownership: this scenario is typically applicable to pre-revenue companies. Many venture capitalists have an internal strategy of owning a certain minimum percentage of a company. Typically, this minimum is 15-20 per cent post-funding in early-stage companies. Once the investor has made the decision to invest, they have estimated the exit potential and returns for their investment. Accordingly, they have also determined the amount of investment to be made initially to achieve the desired returns.
The investor will typically use the amount of investment and desired ownership to determine the valuation of a private company in such a scenario. The worksheet titled "Ownership" provides a valuation computation tool for this scenario. Follow the directions within the worksheet. Financial Ratios: this scenario is typically applied to revenue-stage companies. The first scenario outlined above may still be applicable either entirely or partially. A public company is typically valued in multiple ways using various financial ratios. These include Price to Earnings (PE), Price to Sales (PS), Discounted Cash Flow (DCF), Shareholder Equity, or a combination of the four. Many of these ratios are not directly applicable to a private company due to lack of sufficient history and early revenue growth stage. PS and PE are most applicable to companies in the early- revenue growth stage. PE is generally applicable only in very late-stage companies with a significant revenue and profitability history. Private-company investors use the PS ratio as a guide most of the time in valuing a revenue-stage company.
The worksheet titled "Financial Ratios" provides a valuation computation tool for this scenario using PS and PE ratios. Simply insert the CD-ROM, open the spreadsheet, and input your data. The model will calculate and generate the valuation for you. The model can be modified to incorporate more complicated components if you choose. In addition, a report entitled "Establishing Valuations for Tech Companies: An Overview" is embedded in the model - this exclusive report shares the best practices on how he calculates technology valuations for private companies. Within these spreadsheets lies a wealth of critical information which every entrepreneur, venture capitalist, and executive should have at their fingertips.

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