Questions from Entrepreneurial Finance

Q: What is meant by “finding the value of a venture’s assets

What is meant by “finding the value of a venture’s assets is the same as finding the value of a venture’s debt plus equity”?

Q: What is meant by the utopia discount process? Describe how expected

What is meant by the utopia discount process? Describe how expected present value is calculated.

Q: What is the difference between discounting expected cash flows from multiple scenarios

What is the difference between discounting expected cash flows from multiple scenarios at a constant rate and averaging the scenarios’ PVs calculated with that single discount rate?

Q: Describe the basic venture capital (VC) method for estimating a

Describe the basic venture capital (VC) method for estimating a venture’s value.

Q: Describe the process for estimating the percentage of equity ownership that must

Describe the process for estimating the percentage of equity ownership that must be given up by the founder when a new equity investment is needed.

Q: How does a present value venture valuation pie differ from a future

How does a present value venture valuation pie differ from a future value valuation pie?

Q: What is meant by pre-money valuation? What is post

What is meant by pre-money valuation? What is post-money valuation?

Q: What are the meanings of the terms “cash build” and

What are the meanings of the terms “cash build” and “cash burn”? How do we calculate net cash burn rates?

Q: What is staged financing? Describe how the capitalization (cap)

What is staged financing? Describe how the capitalization (cap) rate is calculated.

Q: How is multiplying a projected earnings by a P/E ratio

How is multiplying a projected earnings by a P/E ratio similar to discounting a perpetuity of earnings starting at that level?