The negotiation template estimates the value of the company based on multiple rounds of Investment. The timing of each round of Investment and the IPO can be modified. Use the Negotiation Workspace to test various dilution assumptions.
The present value of the firm is calculated using a risk-adjusted discount rate. Discount rates of 50 to 100% are frequently used in valuing start-up businesses to capture the inherently risky nature of new ventures.
The venture capital method assumes that a firm will undertake an Initial Public Offering (IPO) at some point in the future or be acquired, i.e., a “Liquidity Event”. The firm's future value is determined by multiplying the earnings of the firm in the Liquidity Event year by the expected price/earnings (P/E) ratio that the market will support. This provides the expected future value of the firm.
Investor Negotiation Calculator
Calculate individual Investor's ROI & IRRPredict a future value for the investor
Track investors' vs. founders' sharesUp to 3 rounds of investments
Investor negotiation calculator
Investor negotiation tool