For
those who are interested in an in-depth discussion of the “Venture Capital” and
the “First Chicago” methods for valuing private company investments, we recommend
reviewing Method For Valuing High-Risk, Long-Term Investments The
“Venture Capital Method” by Harvard Business School Professor William A.
Sahlman and Associates Fellow Daniel R. Scherlis. The revised article, published on July 24,
2009, is available for download at Harvard
Business Review.
For an additional, summary explanation of the methods,
please see Valuing a Business: The Venture Capital Method, National Association of Certified Valuators
and Analysts (NACVA) 1999, offered by The McLean Group at http://www.mcleanllc.com/pdf/vcarticle99.pdf.
The “Venture
Capital” and the “First Chicago” methods, which are considered by many to be
the most appropriate methods for valuing private company investments, can be
implemented in minutes using the
Corpfin.Net’s Web-native Private Equity Placement
and LBO Valuation
models.
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