The “Venture Capital” and “First Chicago” Methods for Valuing Private Company Investments

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.