Date: Thursday, November 6, 2014
10:00am-11:40am PT / 1:00pm-2:40pm ET
Format: A BVR Webinar

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Featuring  (click image for bio)

Joel Johnson
Orchard Partners, Inc.

About This Program

Compared to more traditional firm structures, legal, regulatory, and financial matters play a much larger role in the determination of value of equity securities for venture-backed companies. In "Preferred Stock: Valuing Multiple Layers of Equity Securities in Venture-Backed Companies" expert Joel Johnson dissects the determinants to equity value in venture-backed companies to show how to properly assess the value of both preferred and common shares. His presentation addresses equity values and their valuations, including a discussion of which valuation techniques are most appropriate for this unique setting.


  • Features of preferred stock which affect their value:
    • Liquidation preference
    • Cumulative and non-cumulative dividends
    • Participation and participation caps
  • How to identify each of these features in a company's articles of incorporation
  • Review "tranched" preferred stock and a model for separating the value of the forward contract from the issued security
  • Review a stock purchase agreement and other legal documentation to identify tranche amounts, tranche milestones and "pay to play" provisions
  • How to build a "waterfall schedule" showing the payout of equity to each class of preferred and common stock
  • How to calculate equity "breakpoints" for an option-pricing model
  • Review the major methods for allocating value among preferred and common securities: the PWERM, the OPM and hybrid
  • Review when an OPM backsolve method is and is not appropriate
  • Alternatives for addressing the value of preferred warrants
  • How to determine if the valuation model's results are reasonable

Learning Objectives

  • Identify the drivers of value for equity securities in venture-backed companies
  • Define how these drivers are determined and recorded and identify how to put these resources to use in the valuation process
  • Associate traditional equity modeling and valuation techniques with assignments for venture-backed companies
  • Identify how to assess the reasonableness of a valuation model's results

Single Connection Policy

Admission to this event authorizes one computer and phone connection for one location. These connections may be transferred users and/or locations. Multiple concurrent connections for a single admission registration are not allowed.

Multi-User CPE Policy

Admission to this program includes one CPE certificate for one individual. Any additional listeners requesting CPE must pay a processing fee assessed at the completion of the online CE survey for this course.

CPE Processing Fees may be bypassed by entering a valid, unused CPE Authorization Code (for single event purchasers) or by logging into BVR's website (for subscribers to BVR's Training Series).

CPE Information

Prerequisites: Knowledge of Business Valuation
Program Level: Advanced
Preparation Required: None
Delivery Method: Group Internet-Based
Recommended CPE: 2 Credit Hours (Specialized Knowledge & Applications)

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