The valuation of equity securities issued by venture backed, early stage companies requires a disciplined application of methodologies that are often misunderstood or misapplied. In this webinar, the speakers will present a summary of available valuation and allocation methodologies, as well as key guidance, and the application of these methodologies from the early stages of funding through an exit event using illustrative examples. Additionally, the speakers will present the development and potential support of critical assumptions for the methodologies and share their opinions based on over a decade-worth of experience of valuing venture-backed, early stage companies.

• Overview of Venture-backed, Early Stage Companies
• Typical Capital Structures
• Common Stock
• Preferred Stock
• Convertible Notes
• SAFEs
• Venture Debt
• Stages of Development
• Overview of Valuation Approaches and Methodologies
• Asset Approach
• Income Approach
• Market Approach
• Overview of Allocation Methodologies
• Current Value Method (CVM)
• Option Pricing Method (OPM)
• Probability-Weighted Expected Return Method (PWERM)
• Hybrid Methods
• Accounting and Other Guidance
• AICPA Practice Guide
• Fair Market Value versus Fair Value
• ASC 820 versus ASC 718
• Derivative Accounting
• Secondary Stock Transactions
• Considerations
• Incorporating into Valuation
• Illustrative Examples
• Inception
• Early Stages
• Later/IPO Stages
• Related Complex Securities
• Discount for Lack of Marketability (DLOM)
• Protective Put Option Models
• Volatility
• Conclusion

• Understand differences in distribution of various allocation methods
• Identify and select the appropriate method based on a company’s stage of development and capital structure
• Learn how to apply allocation methods for convertible notes and SAFEs
• Identify appropriate considerations for selection of discount for lack of marketability