#G-Assignment (Quantitative Valuation) Due: September 26 @ 11:59 pm Total Points: 30 Submit: Canvas #6-Assignment (Quantitative Valuation) Overview: Determine the "Post Money and/or Pre-Money" Valuations and compute the respective percentage ownerships for all Shareholders or Owners in the Company. Can either type-In answers within this Word file and submit or printout a hard copy and hand write in answers, then scan and upload it to Carvas. Recommended to show all computations for partial" grading credit Startup GH: (10 Points): Startup GH, an OSU Riata Center Student startup Incubator business has Internally been developing a software APP to electronically identify volunteer opportunities, document participation, report, and track required "Volunteer hours" for each students at private and/or parochial High Students. The "Volunteer Me" App will stream-line and simplify the entire reporting & tracking" for parents, students, and High School Administrators. Information, regarding a student's cumulative participation, will be continuously accessible and auditable by any party, which is critical given High School Diplomas are typically withheld if this community service requirement is not fulfilled. Conversion to this electronic reporting platform will simplify/eliminate data entry & reporting burdens for BOTH the non-profit organizations, at which student volunteer, and the High Schools. The bottom line is that the App reduces labor costs, improves transparency, and enhances the overall accuracy of the reporting system by eliminating redundant data entry & paperwork. The Founder, a Senior Entrepreneurial major, after extensive End User interviews with all participants just completed designing the overall software system architecture. Since this student has very limited discretionary capital, he/she elected to pursue a "bartering strategy. They effectively identified two OSU student Computer Science programming majors ironically in search of a concept for their Senior Design Capstone project Therefore, in addition to receiving equity in the Startup, in exchange for completing the software APP, these two college students will benefit from a course perceptive. A true "win/win" alignment of resources. Additionally the Entrepreneurial Senior will likewise benefit relative to the student programmers needing to hit or achieve developmental deadlines Even the dual Course Capstone grade requirements. A true "win/win" approach After reviewing the software system design and Business Plan, all the parties agreed the cash value of assigned capital equivalent associated with developing the software APP would be $30,000. However, Student Programmer #1 planned to write 70% of the software code, while Student Programmer #2 would complete the remaining 30%. As a result, these two OSU student programmers agreed to split the equity ownership proportionately le. 70/30 Given Startup GH is positioned in the early Feasibility stage and given that the baseline software product has not yet even been started, the three students mutually agreed the Pre-Money Valuation would be $270,000. What is the imputed Post Money Valuation, and what aggregate equity percentage of Startup GH will EACH of the three students (le Entrepreneurial Student, Student Programmer #1. Student Programmer #2) Individually own after the App software development has been completed? Post Money Valuation $270,000 $30,000 $300.000 Student Programmer #1 % Equity Student Programmer 12 % Equity Entrepreneurial Student Equity v Normal No Spacing Heading 1 Early Stage Company Hl: (20 Points) Company Hi has been in business for four years. While product development took a year longer than projected, the initial market acceptance over the last 18 months has substantially exceeded expectations. During the last trailing twelve months, the Company recorded $1.5 million in sales and even managed to breakeven. As a result of this strong growth plus upwardly revised financial projections, the Company needs to immediately raise $175 million in equity capital to fund this forecasted accelerated growth. Based upon the corresponding "Integrated Financial Model for Early Stage Company Hl. prepared to support this upcoming equity capital offering Company Hl is forecasting generating a $3.75 million EBITDA at the time of forecasted "Exit" (i.e. the year the business is sold). Company Hi plans to raise this equity capital from a couple of small regional economic development oriented Seed Venture Capital Funds and anticipates that these Seed Venture Capital investors will want to target a 5X ROI over this five year investment horizon given the Company's proven revenues and growth rate. Based upon researched Merger & Acquisition activity, a 7X EBITDA multiple should be used to forecast the Company Hi's total "Exit Value" at the time of Exit (forecasted to be in five more years). Given the aforementioned financial projections and forecasted equity investor targeted capital return, what should Early Stage Company HI set or target for a Pre-Money Valuation? Given this targeted Pre-Money Valuation, what aggregate equity percentage will the Seed Venture Capital Fund's) collectively own? What is the aggregate equity percentage that all the existing shareholders will own? (Check your work by using a basic Capitalization Format lie. Pre-money Valuation / Capital Raise / Post Money Valuation and % equity ownership, just round all percentages to tenths, for each - must add to 100%). Pre-Money Valuation ($) Current Shareholders Ownership (% Equity) development oriented Seed Venture Capital Funds and anticipates that these Seed Venture Capital investom want to target a Sx Rol over this five year investment horizon given the Company's proven revenues and rate. Based upon researched Merger & Acquisition activity, a 7X EBITDA multiple should be used to forecas Company Hi's total "Exit Value" at the time of Exit (forecasted to be in five more years) Given the aforementioned financial projections and forecasted equity investor targeted capital return, what should Early Stage Company Hl set or target for a Pre-Money Valuation? Given this targeted Pre-Money Valuation, what aggregate equity percentage will the Seed Venture Capital Fund(s) collectively own? What aggregate equity percentage that all the existing shareholders will own? (Check your work by using a basic Capitalization Format (.e. Pre-money Valuation / Capital Ralse / Post Money Valuation and equity owners Just round all percentages to tenths, for each - must add to 100%). Pre-Money Valuation (5) - Current Shareholders Ownership (% Equity) Seed Venture Capital Fund(s) Ownership (% Equity) Computations (see Slide 4 in #6b-Lecture): Forecasted "Exit" Year EBITDA Industry Average Business EBITDA Sales Multiple Forecasted TOTAL Ext Value Equity Capital Investment Amount Venture Capital Investor "Targeted" ROI Targeted Total trivestor Rol Requirements Seed Venture Capital % Ownership Required Pre-Money Valuation (S) $ Amounts %Equity Check Figures (Simple Cap Table) Existing Shareholders (Pre-Money! Seed Venture Capital Fund (Capitall TOTAL Equity (Post Money Valuation 100.0% #G-Assignment (Quantitative Valuation) Due: September 26 @ 11:59 pm Total Points: 30 Submit: Canvas #6-Assignment (Quantitative Valuation) Overview: Determine the "Post Money and/or Pre-Money" Valuations and compute the respective percentage ownerships for all Shareholders or Owners in the Company. Can either type-In answers within this Word file and submit or printout a hard copy and hand write in answers, then scan and upload it to Carvas. Recommended to show all computations for partial" grading credit Startup GH: (10 Points): Startup GH, an OSU Riata Center Student startup Incubator business has Internally been developing a software APP to electronically identify volunteer opportunities, document participation, report, and track required "Volunteer hours" for each students at private and/or parochial High Students. The "Volunteer Me" App will stream-line and simplify the entire reporting & tracking" for parents, students, and High School Administrators. Information, regarding a student's cumulative participation, will be continuously accessible and auditable by any party, which is critical given High School Diplomas are typically withheld if this community service requirement is not fulfilled. Conversion to this electronic reporting platform will simplify/eliminate data entry & reporting burdens for BOTH the non-profit organizations, at which student volunteer, and the High Schools. The bottom line is that the App reduces labor costs, improves transparency, and enhances the overall accuracy of the reporting system by eliminating redundant data entry & paperwork. The Founder, a Senior Entrepreneurial major, after extensive End User interviews with all participants just completed designing the overall software system architecture. Since this student has very limited discretionary capital, he/she elected to pursue a "bartering strategy. They effectively identified two OSU student Computer Science programming majors ironically in search of a concept for their Senior Design Capstone project Therefore, in addition to receiving equity in the Startup, in exchange for completing the software APP, these two college students will benefit from a course perceptive. A true "win/win" alignment of resources. Additionally the Entrepreneurial Senior will likewise benefit relative to the student programmers needing to hit or achieve developmental deadlines Even the dual Course Capstone grade requirements. A true "win/win" approach After reviewing the software system design and Business Plan, all the parties agreed the cash value of assigned capital equivalent associated with developing the software APP would be $30,000. However, Student Programmer #1 planned to write 70% of the software code, while Student Programmer #2 would complete the remaining 30%. As a result, these two OSU student programmers agreed to split the equity ownership proportionately le. 70/30 Given Startup GH is positioned in the early Feasibility stage and given that the baseline software product has not yet even been started, the three students mutually agreed the Pre-Money Valuation would be $270,000. What is the imputed Post Money Valuation, and what aggregate equity percentage of Startup GH will EACH of the three students (le Entrepreneurial Student, Student Programmer #1. Student Programmer #2) Individually own after the App software development has been completed? Post Money Valuation $270,000 $30,000 $300.000 Student Programmer #1 % Equity Student Programmer 12 % Equity Entrepreneurial Student Equity v Normal No Spacing Heading 1 Early Stage Company Hl: (20 Points) Company Hi has been in business for four years. While product development took a year longer than projected, the initial market acceptance over the last 18 months has substantially exceeded expectations. During the last trailing twelve months, the Company recorded $1.5 million in sales and even managed to breakeven. As a result of this strong growth plus upwardly revised financial projections, the Company needs to immediately raise $175 million in equity capital to fund this forecasted accelerated growth. Based upon the corresponding "Integrated Financial Model for Early Stage Company Hl. prepared to support this upcoming equity capital offering Company Hl is forecasting generating a $3.75 million EBITDA at the time of forecasted "Exit" (i.e. the year the business is sold). Company Hi plans to raise this equity capital from a couple of small regional economic development oriented Seed Venture Capital Funds and anticipates that these Seed Venture Capital investors will want to target a 5X ROI over this five year investment horizon given the Company's proven revenues and growth rate. Based upon researched Merger & Acquisition activity, a 7X EBITDA multiple should be used to forecast the Company Hi's total "Exit Value" at the time of Exit (forecasted to be in five more years). Given the aforementioned financial projections and forecasted equity investor targeted capital return, what should Early Stage Company HI set or target for a Pre-Money Valuation? Given this targeted Pre-Money Valuation, what aggregate equity percentage will the Seed Venture Capital Fund's) collectively own? What is the aggregate equity percentage that all the existing shareholders will own? (Check your work by using a basic Capitalization Format lie. Pre-money Valuation / Capital Raise / Post Money Valuation and % equity ownership, just round all percentages to tenths, for each - must add to 100%). Pre-Money Valuation ($) Current Shareholders Ownership (% Equity) development oriented Seed Venture Capital Funds and anticipates that these Seed Venture Capital investom want to target a Sx Rol over this five year investment horizon given the Company's proven revenues and rate. Based upon researched Merger & Acquisition activity, a 7X EBITDA multiple should be used to forecas Company Hi's total "Exit Value" at the time of Exit (forecasted to be in five more years) Given the aforementioned financial projections and forecasted equity investor targeted capital return, what should Early Stage Company Hl set or target for a Pre-Money Valuation? Given this targeted Pre-Money Valuation, what aggregate equity percentage will the Seed Venture Capital Fund(s) collectively own? What aggregate equity percentage that all the existing shareholders will own? (Check your work by using a basic Capitalization Format (.e. Pre-money Valuation / Capital Ralse / Post Money Valuation and equity owners Just round all percentages to tenths, for each - must add to 100%). Pre-Money Valuation (5) - Current Shareholders Ownership (% Equity) Seed Venture Capital Fund(s) Ownership (% Equity) Computations (see Slide 4 in #6b-Lecture): Forecasted "Exit" Year EBITDA Industry Average Business EBITDA Sales Multiple Forecasted TOTAL Ext Value Equity Capital Investment Amount Venture Capital Investor "Targeted" ROI Targeted Total trivestor Rol Requirements Seed Venture Capital % Ownership Required Pre-Money Valuation (S) $ Amounts %Equity Check Figures (Simple Cap Table) Existing Shareholders (Pre-Money! Seed Venture Capital Fund (Capitall TOTAL Equity (Post Money Valuation 100.0%