Entrepreneurial Finance: Strategy, Valuation, and Deal Structure

Learning Objectives

After reading this chapter you should be able to:

· Articulate the criteria for selecting a valuation model

· Use multiples to estimate the continuing value of a new venture

· Identify and collect the information needed to implement a DCF valuation

· Estimate the components of the new venture’s beta

· Estimate the opportunity cost of capital

· Recognize and use shortcuts in the valuation process

· Implement the primary valuation approaches: RADR and CEQ forms of the CAPM, Relative Value, Venture Capital method, First Chicago method