Venture capital valuation
Channel: Mikko Rönkkö
Date: 2021-01-16

The video describes the venture capital valuation method. Venture capitalist invest in companies with the purpose of growing the company and doing an exit in a few years. The exit can take the form of a trade sale or public stock listing. The valuation method is based on developing a projection of the exit value in a positive case  and discounting it to the present value using a high cost of capital reflecting the high probability that the company fails to reach the positive outcome.