Fenwick & West just released its survey on key metrics for initial public offerings in the technology and life sciences industries. Among its many interesting findings are: “The 59 life sciences and technology offerings completed in the first half of 2019 compared with the 57 in the second half of 2018, continuing a trend of
A capitalization table, a.k.a. “cap table”, is simply a record of who owns which piece of your company. As your company grows, this seemingly straightforward table often becomes increasingly complex. It can be difficult to keep cap tables current for your investors who require them to be up-to-date so that they can see the current
Frequently, startups find it desirable to make stock options cheaper for their employees to exercise. The exercise price, amount an optionee would pay to take ownership of a share of common stock, is commonly set based on the fair market value of the common stock at the time of the grant. Hence, the need for
Well … we don’t believe that, but our observations point to a relative lack of focus on this critical aspect of valuation analysis. Much of formalized valuation guidance proclaims that a valuer should “use professional judgment” or document the “process used in the selection of the guideline public companies.” Yet, there is little guidance on
Financial forecast or Prospective Financial Information (PFI) is the key element of most business valuations. It is a numerical illustration, a distillation of the story that investors buy into. With that, valuation analysis is nothing more than a process of converting the expectations into hard reality of today’s market price.
Convertible debt is popular in financing start-ups. Just as preferred stock, convertible debt is designed to give investors certain economic and legal rights to elevate them above common stockholders. This article discusses convertible debt valuation issues and whether such transactions can be indicative of the issuer’s business enterprise value.
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