Valuation for Startups Using Multiple Approach

Valuation for Startups Using Multiple Approach

This course is part of Valuation and Financial Analysis For Startups Specialization

Instructor: Hyun Han Shin

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5 modules

Gain insight into a topic and learn the fundamentals.

95 reviews

Beginner level

No prior experience required

1 week to complete

at 10 hours a week

Flexible schedule

Learn at your own pace

5 modules

Gain insight into a topic and learn the fundamentals.

95 reviews

Beginner level

No prior experience required

1 week to complete

at 10 hours a week

Flexible schedule

Learn at your own pace

Skills you'll gain

Details to know

Shareable certificate

Add to your LinkedIn profile

Assessments

16 assignments

Taught in English

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This course is part of the Valuation and Financial Analysis For Startups Specialization

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There are 5 modules in this course

In addition to discounted cash flow method, multiple method is one of the most popular methods of firm valuation. PER is often used among financial professionals to make a quick-and-dirty estimate of a firm value. In this course, you are going to learn the concept and usage of PER, PBR and PSR. In addition to these basic multiple ratios, you are going to learn how to make an estimate of enterprise value and founder’s ownership before and after additional funding. Startups require a number of financings before IPO. After taking this course, you are going to be able to answer questions such as What the price per share should be given the startup’s estimate of earnings in the future; How many shares the founder should give up to raise additional capital; and so on? In the discounted cash flow method and multiple method, you are always given earnings or cash flows to make estimate of firm value. In this course, you are also going to learn how to generate cash flows or earnings from the financial statements. After taking this course, you will be able to understand the meaning of financial statements such as balance sheet, income statement and cash flow calculation.

In company valuation, the most often used multiples are PER, PBR, and PSR. PER is the ratio of stock price per share to earnings per share. Since most startups have negative earnings, you cannot use PER in starup. It is the reason why you should know PBR or PSR for startup valuation. After this module, you will be able to explain the concept of those multiples and calculate them easily.

What's included

4 videos3 readings3 assignments1 discussion prompt

4 videos Total 14 minutes

Welcome Video 2 minutes
1.1 Valuation Based on Comparable Firms 3 minutes
1.2 Valuation Based on Comparable Firms (1) PE Ratio 5 minutes
1.3 Valuation Based on Comparable Firms (2) PB Ratio, PS Ratio 4 minutes

3 readings Total 30 minutes

1.1 Slide 10 minutes
1.2 Slide 10 minutes
1.3 Slide 10 minutes

3 assignments Total 54 minutes

Week 1 30 minutes
Practice Question 1 12 minutes
Practice Question 2 12 minutes

1 discussion prompt Total 20 minutes

Comparison with Peers 20 minutes

Investors often talk about the pre-money or post-money valuation of a company at the time they invest. This module will introduce you to concepts of pre-money and post-money valuation. By the end of this module, you can distinguish pre-money and post-money valuation.

What's included

4 videos5 readings5 assignments

4 videos Total 19 minutes

2.1 Pre-money valuation 5 minutes
2.2 Post-money valuation 3 minutes
2.3 Rounds of financing (1) 7 minutes
2.4 Rounds of Financing (2) 4 minutes

5 readings Total 50 minutes

2.1 Slide 10 minutes
Excel Template 10 minutes
2.2 Slide 10 minutes
2.3 Slide 10 minutes
2.4 Slide 10 minutes

5 assignments Total 117 minutes

Week 2 54 minutes
Practice Question 1 12 minutes
Practice Question 2 9 minutes
Practice Question 3 24 minutes
Practice Question 4 18 minutes

Financial statements summarize information about a firm. In order to evaluate and diagnose performance for your startup, your first step is to assess the company’s current condition and interpret financial statements. Thus, through this module, you will briefly learn main financial statements: balance sheet, income statement, and cash flow statement.

What's included

3 videos4 readings3 assignments

In this module, you will learn cash flow identity which consists of cash flow to assets and cash flow to creditors and stockholders. Furthermore, you are able to calculate cash flow. Basically, this module is strongly related to module 3, financial statements. Students are encouraged to review all contents in module 3. Lastly, wrap-up review lecture are provided.

What's included

3 videos4 readings3 assignments1 discussion prompt

3 videos Total 22 minutes

4.1 Cash Flow 8 minutes
4.2 Cash Flow Calculation 6 minutes
4.3 Review 9 minutes

4 readings Total 40 minutes

4.1 Slide 10 minutes
4.2 Slide 10 minutes
4.3 Slide 10 minutes
Excel Template 10 minutes

3 assignments Total 105 minutes

Week 4 30 minutes
Final Quiz 66 minutes
Practice Question 9 minutes

1 discussion prompt Total 20 minutes

Cash Flow Analysis 20 minutes

In this module, you will deal with Ysom, Inc which was founded in 2015 by Professor Shin and Professor Lee. The purpose of this module is to compute cash flows and create financial statements what you have learned during four weeks.