Market Multiples
Start-Up Multiples
Key Considerations When Comparing Metrics for Startup Exit Valuation Important Factors to Consider When Comparing Metrics for Startup Exit Valuation with Similar Companies: EV/Revenue = margin * (1-tax […]
EON Investment Insights
Understand stock price as a forecast
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DCF Valuation
DCF for Exit Valuation
The use of the Venture Capital (VC) method for valuing an organization begins with determining the Exit Valuation, i.e., the value that the organization is expected to have […]
Growth
Zen
When discussing the evaluation of startups using the #VC method, one interesting point comes to mind: As I mentioned earlier, investment funds should provide an answer to the […]
VC Valuation
VC Method
VC Method There is a startup valuation method called the VC (Venture Capital) method, which differs from the DCF method for mature companies, as cash flows in startups […]
VC Valuation
Exit Diagrams
Venture capital funds primarily use preferred shares (redeemable, convertible, mandatorily convertible, automatically convertible, etc.) to finance startups. Based on the details of the agreement, exit diagrams are created, […]
Market Efficiency
Self-dealing Index
One of the critical concerns for VC funds is the issue of self-dealing. An index describes how this problem is addressed legally across different countries. Self-dealing, Tunneling, and […]
VC Valuation
Statistics of startup selection
Startup companies are chosen by venture capital funds: Source: Venture Capital & the Finance of InnovationAndrew Metrick & Ayako YasudaSecond Edition
Risk
The Pastor-Stambaugh Model
Startup Valuations: Venture Funds vs. The Pastor-Stambaugh Model In the evaluation of startup valuations, venture capital funds often rely on The Pastor-Stambaugh model (PSM) instead of the Capital […]
Investor Psychology
Freakonomics – The Hidden Side of Everything
It’s a good book. I liked it, and I’ll summarize the findings. First of all, I’ll say that it’s an extraordinary book, where the opinions presented are based […]
Investor Psychology
The Effect of Expectations
Value investing seems very simple – you buy a stock when it’s below its intrinsic value and sell it when it exceeds that intrinsic value. But in reality, […]
Risk
Cost of Equity Formulas
According to the M&M theory, the formula for unlevering and levering capital is straightforward, but there are variations of the formula adapted to different situations. Situations can vary […]
Other Valuation Methods
Valuation of Cyclicals
It is evident from practice that in cyclical industries (aircraft, iron, paper, chemicals, real estate…) organizations periodically create excess capacity and cycle the industry. When selling prices are […]
Other Valuation Methods
Economic Spread Valuation of Banks
The text discusses the challenges and methods involved in valuing financial institutions, particularly banks, compared to corporations. Here’s an English translation: Valuing Banks: It is considered that evaluating […]
Cross-Border Valuation
Country Risk in Valuation
Evaluating organizations operating in developing countries is associated with certain difficulties, and in this area, academics and practitioners often do not agree. The issue is that developing markets […]
WACC, CoC, Structure
Credit Rating Determinants
When evaluating an organization, one of the important decisions concerns the target leverage, which affects the WACC (Weighted Average Cost of Capital) and consequently the valuation outcome (naturally, […]
WACC, CoC, Structure
Optimal Leverage Range
The optimal level of financial leverage is determined, on the one hand, by the amount of tax savings an organization receives by deducting interest expenses, and on the […]
WACC, CoC, Structure
Payout Decisions
The decision to pay dividends or repurchase shares impacts stock prices due to the expectations and signals such decisions create. Therefore, these decisions need to be systematic and […]
WACC, CoC, Structure
Capital Structure & Value
Financial theory tells us that there is an optimal capital structure derived from tax savings and the risks of financial leverage, but it says little about how to […]