Valuation for Startups Using Multiple Approach

About this course: In addition to discounted cash flow method, multiple method is one of the most popular methods of firm valuation. PER is often used among financial professionals to make a quick-and-dirty estimate of a firm value. In this course, you are going to learn the concept and usage of PER, PBR and PSR. In addition to these basic multiple ratios, you are going to learn how to make an estimate of enterprise value and founder’s ownership before and after additional funding. Startups require a number of financings before IPO. After taking this course, you are going to be able to answer questions such as What the price per share should be given the startup’s estimate of earnings in the future; How many shares the founder should give up to raise additional capital; and so on? In the discounted cash flow method and multiple method, you are always given earnings or cash flows to make estimate of firm value. In this course, you are also going to learn how to generate cash flows or earnings from the financial statements. After taking this course, you will be able to understand the meaning of financial statements such as balance sheet, income statement and cash flow calculation.

Who is this class for: The target audience of this Specialization includes venture capitals, angel investors, and entrepreneurs, Particularly, entrepreneurs are wondering the value of their startups and how much ownership they need to give up to raise additional capital. It is same for angel investors. They are wondering how much ownership they need to ask in return for their investment.  Venture capitals may know the value of startups better than entrepreneurs or angel investors but they need to communicate with startups how they value startups. This Specialization helps angel investors, entrepreneurs, and venture capitals understand and communicate the value of startups.

Created by:  Yonsei University

• Taught by:  Hyun Han Shin, Professor

  School of Business

Basic Info Course 2 of 5 in the Valuation and Financial Analysis For Startups Specialization Level Beginner Language English, Subtitles: Korean How To Pass Pass all graded assignments to complete the course. User Ratings 3.9 stars Average User Rating 3.9See what learners said Coursework

Each course is like an interactive textbook, featuring pre-recorded videos, quizzes and projects.

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Yonsei University Yonsei University was established in 1885 and is the oldest private university in Korea. Yonsei’s main campus is situated minutes away from the economic, political, and cultural centers of Seoul’s metropolitan downtown. Yonsei has 3,500 eminent faculty members who are conducting cutting-edge research across all academic disciplines. There are 18 graduate schools, 22 colleges and 133 subsidiary institutions hosting a selective pool of students from around the world. Yonsei is proud of its history and reputation as a leading institution of higher education and research in Asia.

Syllabus


WEEK 1


Valuation Based on Comparable Firms



In company valuation, the most often used multiples are PER, PBR, and PSR. PER is the ratio of stock price per share to earnings per share. Since most startups have negative earnings, you cannot use PER in starup. It is the reason why you should know PBR or PSR for startup valuation. After this module, you will be able to explain the concept of those multiples and calculate them easily.


4 videos, 3 readings, 2 practice quizzes expand

1. Video: Welcome Video
2. Video: 1.1 Valuation Based on Comparable Firms
3. Reading: 1.1 Slide
4. Video: 1.2 Valuation Based on Comparable Firms (1) PE Ratio
5. Reading: 1.2 Slide
6. Practice Quiz: Practice Question 1
7. Video: 1.3 Valuation Based on Comparable Firms (2) PB Ratio, PS Ratio
8. Reading: 1.3 Slide
9. Practice Quiz: Practice Question 2
10. Discussion Prompt: Comparison with Peers

Graded: Week 1

WEEK 2


Pre & Post-money valuation



Investors often talk about the pre-money or post-money valuation of a company at the time they invest. This module will introduce you to concepts of pre-money and post-money valuation. By the end of this module, you can distinguish pre-money and post-money valuation.


4 videos, 5 readings, 4 practice quizzes expand

1. Video: 2.1 Pre-money valuation
2. Reading: 2.1 Slide
3. Reading: Excel Template
4. Practice Quiz: Practice Question 1
5. Video: 2.2 Post-money valuation
6. Reading: 2.2 Slide
7. Practice Quiz: Practice Question 2
8. Video: 2.3 Rounds of financing (1)
9. Reading: 2.3 Slide
10. Practice Quiz: Practice Question 3
11. Video: 2.4 Rounds of Financing (2)
12. Reading: 2.4 Slide
13. Practice Quiz: Practice Question 4

Graded: Week 2

WEEK 3


Financial Statements



Financial statements summarize information about a firm. In order to evaluate and diagnose performance for your startup, your first step is to assess the company’s current condition and interpret financial statements. Thus, through this module, you will briefly learn main financial statements: balance sheet, income statement, and cash flow statement.


3 videos, 4 readings, 2 practice quizzes expand

1. Video: 3.1 Financial Statements (1)
2. Reading: 3.1 Slide
3. Practice Quiz: Practice Question 1
4. Video: 3.2 Financial Statements (2)
5. Reading: 3.2 Slide
6. Video: 3.3 Cash Flow Calculation
7. Reading: 3.3 Slide
8. Reading: Excel Template
9. Practice Quiz: Practice Question 2

Graded: Week 3

WEEK 4


Cash Flow



In this module, you will learn cash flow identity which consists of cash flow to assets and cash flow to creditors and stockholders. Furthermore, you are able to calculate cash flow. Basically, this module is strongly related to module 3, financial statements. Students are encouraged to review all contents in module 3. Lastly, wrap-up review lecture are provided.


3 videos, 4 readings, 1 practice quiz expand

1. Video: 4.1 Cash Flow
2. Reading: 4.1 Slide
3. Video: 4.2 Cash Flow Calculation
4. Reading: 4.2 Slide
5. Practice Quiz: Practice Question
6. Video: 4.3 Review
7. Reading: 4.3 Slide
8. Reading: Excel Template
9. Discussion Prompt: Cash Flow Analysis

Graded: Week 4
Graded: Final Quiz

WEEK 5


Case Study
In this module, you will deal with Ysom, Inc which was founded in 2015 by Professor Shin and Professor Lee. The purpose of this module is to compute cash flows and create financial statements what you have learned during four weeks.


1 reading expand

1. Reading: Case Study Quiz: Ysom Inc.

Graded: Case Study Quiz (1)
Graded: Case Study Quiz (2)