Investors Return- VC Method
It takes into account the required returns investors expect to earn when exiting the start-up in order to have a profitable portfolio. A venture capital method is a quick approach to the valuation of companies. It estimates the exit value of the company at the end of the forecast horizon and ignores the intermediate cash flows. The exit value is calculated by taking the EBITDA of the last projected year and applying the EBITDA multiple. This value is then discounted at a high rate to get the present value.
