The valuation of early-stage companies presents special challenges. Early-stage companies are characterized by high growth rates and lack of profitability. They may range in size from startup firms with no revenue to multibillion-dollar enterprises (think of Uber prior to its IPO). A common feature of early-stage companies is their reliance on recurring venture capital financing rounds to be able to continue operations. No matter how large these companies are, they will still need investor capital to stay in business and reach their operational goals.

This webinar provides an overview of recent trends in the valuation of early-stage companies. We will review the guidance the International Valuation Standards Council (including the most recent IVS 500), the Luxembourg Valuation Professionals Association IPEV, and AICPA provide, and we will then provide practical, step-by-step examples of how to handle some current challenges in early-stage valuation, such as the valuation of SAFEs, how to incorporate down rounds in the valuation, how to roll forward stale rounds.

• International Valuation Standards Council: guidance on early-stage valuation;

• IPEV Guidelines: guidelines on early-stage valuation

• Down rounds in early-stage valuation;

• Rolling forward stale rounds: a case study;

• SAFEs and the backsolve method

1. Become familiar with the AICPA, IVS, and IPEV guidance on the valuation of early-stage companies;
   
2. Identify recent trends in the valuation of early-stage companies in the current market;
   
3. Illustrate how to incorporate a down round in a Black-Scholes option pricing mode;
   
4. Illustrate how to value a simple agreement for future equity (SAFE) using the back-solve method; and
   
5. Illustrate how to roll forward a stale round from the calibration to the valuation date.