This course will provide the financial professional a new approach for addressing the unique challenge of valuing a New Venture or a New Product. Critical topics, such as how to overcome the short comings of the Venture Capital Valuation Method, how Commercialization Risk affects valuation, how the use of Real Options Analysis improves valuations and how to assign Discount Rates in an uncertain environment, will be introduced as a means to develop a risk-based valuation technique. Using the anticipated cash-flow from a new venture/new product, this systematic valuation method takes into consideration the changing risk profile as commercialization risk is reduced to arrive at a market validated valuation.
By the end of the course, those financial professionals with expertise in Excel will be able to construct the needed detailed financial forecast model and valuation model to perform this technique. Sample spreadsheet templates of these two models will be supplied with Part II of this course. Part II of this course will provide tutorials on how to customize these spreadsheet templates.
Course Series
This course is included in the following series:
2 CoursesNew Venture and Product Valuation
- Pre-Revenue New Venture and New Product Valuation Technique: Part I
- Pre-Revenue New Venture and New Product Valuation Technique: Part II
Learning Objectives
- Identify a typology that explains how commercialization risk affects new ventures/new products.
- Recognize when a new venture/new product’s commercialization risk has been minimized and when “normal business risk” has been achieved.
- Identify a new venture/new product’s value-changing events and discover how to assign discount rates to these events.
- Discover how to use comparable company/product financial information to determine a market-based valuation.
- Discover how to use the discounted cash flow into perpetuity formula with varying discount rates to arrive at a valuation.
- Discover the concept of a “balanced investment,” how it can be achieved and what it means if it cannot be achieved.
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Prerequisites
No Advanced Preparation or Prerequisites are needed for this course.