Part II: The Investment Process
Chapter 7
Valuation, Cap Tables, and Dilution
Venture valuation is not discounted cash flow. It is a negotiated price per share for a security that carries preferences, usually set by working backward from a hoped-for exit and the ownership the investor needs, and then diluted by every later round.
The preview ends here. The full chapter is in the book.
In this chapter
- 7.1Pre-money, post-money, and price per share
- 7.2The option pool shuffle
- 7.3SAFEs and notes
- 7.4Dilution compounds
- 7.5The VC method