please answer all!
Out Reach Networks: First Venture Round FIN 470 April 2019 1 Question What are the challenges of valuing an early-stage company? How is it that the Everest Partners offers $30 million in funding for 30% of the company? Is that offer as off base as Perez seems to think it is? 2 Question In what ways is ORN a typical start-up company? In what ways is it atypical? Do any of its particlar characteristics give Perez an opening to push back on the terms of the deal? 3 Question What is the value of the firm under venture capital method? 4 Question What is the value of the firm under the discounted cash flow method? How does the DCF value differ from the value under the VC method? 5 Question What are some of the differences between a target rate under the VC method and a market-adjusted rate, such as that obtained from the Capital Asset Pricing Model (CAPM)? 6 Question Is Everest Partners justified in asking for a 30% equity stake? 7 Question Given the high equity stake that Everest Partners is demanding, should Perez take VC funding? How much in terms of equity percentage is VC sponsorship worth? What should Pete Perez do in this acquisition? Out Reach Networks: First Venture Round FIN 470 April 2019 1 Question What are the challenges of valuing an early-stage company? How is it that the Everest Partners offers $30 million in funding for 30% of the company? Is that offer as off base as Perez seems to think it is? 2 Question In what ways is ORN a typical start-up company? In what ways is it atypical? Do any of its particlar characteristics give Perez an opening to push back on the terms of the deal? 3 Question What is the value of the firm under venture capital method? 4 Question What is the value of the firm under the discounted cash flow method? How does the DCF value differ from the value under the VC method? 5 Question What are some of the differences between a target rate under the VC method and a market-adjusted rate, such as that obtained from the Capital Asset Pricing Model (CAPM)? 6 Question Is Everest Partners justified in asking for a 30% equity stake? 7 Question Given the high equity stake that Everest Partners is demanding, should Perez take VC funding? How much in terms of equity percentage is VC sponsorship worth? What should Pete Perez do in this acquisition