Q5-2 Venture valuation with multiples A venture capitalist firm wants to invest $1.5 million in your NYDeli dot.com venture that you started six months ago. You do not expect to make a profit until year four when your net income is expected to be $3 million. The common stock of BioSystems, a "comparable" firm, currently trades in the over-the- counter market at $30 per share. BioSystems' net income for the most recent year was $300,000 and the firm has 150,000 shares of common stock outstanding. A. Apply the VC method to determine the value of the NYDeli at the end of four years. Ishte Comparable's price = ? Comparable's EPS = ? Roxs ad deinit so slame is an ezu na OY Comparable's P/E = ? 2noizoup arwens of all ar atni zlzylins lxs adlt you Venture's earning = ?? molto Leo Venture's projected value at year 4 = ? so woll 263 29 mit OY y lupa yd boni 200 mil y que B. If VCs want a 40% compound annual rate of return on similar investments, what is the present value of your NYDeli venture? 000,02 E 159 000011 0000219 Present value = (Value at year 4)/(1+r)^4 = ? 000 081 159 sy dit 05 ot babaliw bnc at til at se ogoro C. What percentage of ownership of the NYDeli dot.com venture will you have to give up to the VC firm for its $1.5 million investment? ve broadbaneswangy solvinar od blow HW D-1-20 SOV Ownership = ?? Sea 05-2 Comparable firm Value of shares EPS price comparable (P/E)" 100000 150000 22 10 72 "T"| 0 0.4 3.000.000.00 discount rate Project earnings year 4 Project value year 4 - Present value project value / (1 114 Current investment Owership on pre money onwership on post-money 1.500.000,00 72 72