Understanding the legal economic rights on terms sheets for preferred shares – and how they affect founders and other shareholders – is critical for any new financing round or exit strategy. It is commonly perceived that startups will either completely fail, or enjoy a huge exit. When researching actual startup exits, however, (M&A, IPO or … Continue reading Exit Scenarios: Understanding Preference Rights
Identifying the key valuation questions for CFOs, key employees, and advisors that were granted stock options in private companies Determining an exercise price for a new grant of stock options, understanding at which company value your stock options are at the money, or valuating stock options at fair market value for secondary deals or an … Continue reading Stock Options in Tech Companies: What Are They Worth?
Many startups at the stage of raising capital from large investors issue preferred shares with warrants on the same share class. Recent market data shows that in the last few years, a large majority of preferred shares are non-participating preferred (CAP X1). With this type of share class and the company value reflecting conversion to … Continue reading Test Case: Warrants on Preferred Shares vs. Options on Common Shares
Startup valuation could end up being a deal breaker. Startup valuation is not only impacted by its development stage, but by several other factors as well. From seed to M&A to IPO, startups need to raise money at different stages of development. It’s a question of survival. One of the main issues they face during … Continue reading What are the Factors That Really Impact Your Startup Valuation?
When performing valuations based on multiples of publicly traded companies, choosing comparable peers is an often overlooked but important task. When the valuated company is from the technology industry, the task becomes especially tricky. Technology companies operate in a complex business environment, with many layers of operation and innovation within. This means that the … Continue reading Choosing the Right Peers When Valuating Based On Comparable Company Multiples
The KoreConx Platform Disrupts the Equity Crowdfunding Market by Offering a Free, All-in-One Solution to Help Companies Navigate Equity Capital Raising. KoreConX is emerging as a disruptive professional crowdfunding platform in North America, by offering an integrated suite of due diligence and shareholder management tools that greatly improve the way both companies and equity crowdfunding portals navigate the equity … Continue reading KoreConX Enlists AlgoValue to Expand Its Equity Crowdfunding Services
During the last few years, the trend of venture capital firms and other investors requesting liquidation preferences in term sheets has significantly changed. In the last three or four years, investors have switched from fully participating preferred shares in most previous deals, to non-participating preferred shares in a majority of deals. In this article, we’ll … Continue reading Investment in Startups: Main Impacts of Change in Investors’ Term Sheets
Many startups at the seed stage raise capital from private investors and issue convertible notes or notes known as ‘SAFE’ (Simple Agreement for Future Equity). At this stage, their cap table is still relatively simple, and includes exclusively common shares and perhaps a few options granted to key employees. The problem for companies’ post-money Series … Continue reading From Seed Convertible Note to Series A Round – The Real Impact for Startups’ Founders
Valuation of early stage companies now accessible to users of DealIndex’s proprietary investment and analytics dashboard. <London, UK > Users of DealIndex’s Deal Exchange, a crowdfunding aggregator and investment analytics dashboard, can now access and make use of AlgoValue, an online valuation and a cap table analysis platform developed by former ‘Big 4’ valuation experts … Continue reading AlgoValue’s Innovative Equity Valuation Tool is Now Available on DealIndex’s Deal Exchange
As Crowdfunding Matures, is Valuation the Critical Issue that People Ignore? Crowdfunding join the increasingly respectable alternative finance (‘AltFi) Recently, when it had just become legal in a few enlightened jurisdictions to raise equity directly from the public through online platforms, valuation wasn’t much of a problem. Fund raises were small, a novelty afforded to … Continue reading ‘The Elephant in the Room’
Audit Support As you all know, Audit Support is a critical part of any formal valuation workflow. At a minimum, Audit Support advises audit teams of a firm’s clients, regarding accounting issues that are often based on financial valuations. Financial valuations are typically performed by an independent third party expert, such as a business valuation … Continue reading AlgoValue: Providing Valuable 409A Audit Support
Very interesting article from the Wall Street Journal, about the challenges that startups and hi-tech companies face today when trying to properly valuate their pre-money value. It’s just another example of how AlgoValue is a tool that can help you better valuate your startup, through our powerful and comprehensive online valuation and cap table analysis platform.We … Continue reading Tech Startups Valuation Challenges
Most investors in start-up companies rely on post-money value for purposes of determining the impact of a new round of financing or a grant of stock options. This is misguided. Why? A company’s post-money value is typically based on a very simplified version of its cap table. It ignores differences in share classes, including the … Continue reading Is Post-Money Value Relevant?