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

  1. Pre-Revenue New Venture and New Product Valuation Technique: Part I
  2. 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.
Last updated/reviewed: August 4, 2023
40 Reviews (108 ratings)

Reviews

5
Member's Profile
This approach is an immense improvement over the traditional VC valuation method where a high IRR objective is forced on a far off future valuation. This new approach also promotes better communication between the founders and the investors- a more collaborative discussion will yield always yield a more accurate valuation. Looking forward to Part 2.

5
Anonymous Author
As a corporate banker, I typically only deal with established companies but now that we are looking to increase our presence in the technology space, this is some helpful information to consider.

5
Member's Profile
This session tackles a topic that presents a dilemma to any finance professional who wants to help drive strategy in an innovative setting!

5
Member's Profile
Interesting course with a great depth of knowledge on valuation techniques, I recommend this course to others.

5
Anonymous Author
Excellent course! Very organized and easy to follow with great explanations and examples. Ready for part II!

5
Anonymous Author
Great way to look at new companies and/or product lines where the traditional dcf model doesn’t make sense.

5
Anonymous Author
Excellent course with great suggestions for a more reasoned approach to valuing new business.

5
Member's Profile
Slide materials were a bit harder to follow and a bit lengthy. Overall, decent presentation.

5
Member's Profile
I liked the information pertaining to managing risk when taking on new investment venutres.

5
Anonymous Author
This was a very informative course that was very well presented. I plan to take Part II.

4
Anonymous Author
Good discussion on valuation. I hope there are more samples on the actual valuation.

5
Anonymous Author
Well presented course. A lot of material that was covered clearly and quickly.

4
Anonymous Author
Very useful adaption to an historically one-sided valuation approach.

4
Member's Profile
very interesting and I would suggest this course to a college student

5
Member's Profile
The step-by-step nature brought clarity to a complicated discussion.

5
Member's Profile
Excellent Intro to the subject. Very informative and practical.

5
Member's Profile
Very interesting, comprehensive course. Would recommend.

5
Member's Profile
Good explanation of material and spreadsheet examples

5
Member's Profile
very helpful in understanding new venture valuation!

4
Member's Profile
Unique look I have never considered. Made me think!

5
Member's Profile
Very informative - great new ideas to consider

5
Anonymous Author
Challenging but great course overall.

5
Anonymous Author
Great overview of key concepts.

4
Member's Profile
not crazy about the course

5
Member's Profile
A very interesting topic.

4
Member's Profile
Very interesting course.

4
Anonymous Author
Difficult but enjoyable

5
Member's Profile
Very informative course!

3
Anonymous Author
Helpful information.

5
Member's Profile
very informative

5
Anonymous Author
Great powerpoint

5
Anonymous Author
Great Material

5
Member's Profile
Great course.

5
Member's Profile
Great Lesson!

4
Anonymous Author
Great Course!

4
Anonymous Author
Hard course

4
Member's Profile
Informative

5
Member's Profile
Excellent!

5
Member's Profile
Good course

5
Anonymous Author
Good Class!

Prerequisites
Course Complexity: Advanced

No Advanced Preparation or Prerequisites are needed for this course.

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction11:19
PART: I
  Commercialization Risks9:13
  New Venture Valuation Problems8:30
  Real Options & Discount Rates and Commercialization Risks7:57
  Risk-Based Valuation Technique8:19
  Risk Based Valuation Technique Cont.10:35
  Existing Companies5:48
  Implementation Tools13:30
CONCLUSION
  Summary1:31
Continuous Play
  Pre-Revenue New Venture and New Product Valuation Technique: Part I1:20:34
SUPPORTING MATERIALS
  Slides: Pre-Revenue New Venture and New Product Valuation Technique: Part IPDF
  Pre-Revenue New Venture and New Product Valuation Technique: Part I Glossary/IndexPDF
  ABC Sample Valuation ReportPDF
REVIEW & TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam