Entrepreneurial Finance: Strategy, Valuation, and Deal Structure

Learning Objectives

After reading this chapter you should be able to:

· Use the CAPM to value an investment by either the Certainty Equivalent (CEQ) method or the Risk-Adjusted Discount Rate (RADR) method

· Use the Relative Value method using accounting-based and non-accounting-based approaches

· Use two common venture capital valuation methods: the First Chicago method and the Venture Capital method

· Recognize the strengths and weaknesses of each valuation method