Valuation for Startups Using Multiple Approach (Coursera)

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.

Course 2 of 5 in the Valuation and Financial Analysis For Startups Specialization.

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.

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.

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.

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.

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.