Venture Capital Valuation -- Contents -- Acknowledgments -- Introduction What You Don't Know About Valuation Will Cost You Money -- Chapter 1 Using Facebook, Twitter, and LinkedIn to Explain VC Valuation Gains and Losses: How VCs, Angels, Founders, and Employees Give Up Investment Cash Flow Every Day -- Did Valuation Ignorance Cost ConnectU (and the Winklevosses) 50MM? -- An Expert Doesn't Need a 409A Valuation When He or She Has a Certificate and Basic Math -- Valuing Facebook's Common Stock Compared to Preferred Stock in Minutes -- What the Winklevosses Would Have Seen in Any 409A Valuation Report -- Deriving a Discount for Lack of Marketability for Valuations -- Facebook at 80 Billion Valuation versus Enron at 80 Billion Valuation -- Deal Terms, Waterfalls, and the Pre-Money Myth -- The Pre-Money Myth -- Summary -- Chapter 2 Should Venture-Backed Companies Even Consider a DCF Model?: Introducing the Life Science Valuation Case: Zogenix -- Zogenix: Company Background Summary and Highlights -- Leaping Forward Just 20 Months, the Company Files for an IPO -- Order of Valuations Presented in This Case -- Chapter 3 Valuation Methods versus Allocation Methods Regarding Zogenix -- Separating Enterprise Value from the Allocation of That Value -- Valuing Total Equity -- Using Future Value (FV) and Present Value (PV) to Value Future Cash Flows Today -- Summary -- Chapter 4 Applying the Typical DCF Model to a Venture-Backed Company Hardly Ever Works -- The Gordon Growth Model -- High Growth Limits the Gordon Growth Model -- Dividend Irrelevance and Capital Structure Irrelevance -- Using Comparables (Generally Market Multiples) to Generate a Terminal Value -- Actual Differences between Angels and VCs versus Perceived Differences -- Applying Valuation Methods and Allocation Methods at Inception -- Summary.

Chapter 5 "Enterprise Value" + "Allocation Methods" = Value Destruction: Undervaluing Companies and Overvaluing Employee Options -- Most 409A Valuations Undervalue the Company and Simultaneously Overvalue Employee Stock Options -- Did Auditors Drive Valuators to Overvalue Employee Stock Options? -- Most 409A Enterprise Value Calculations Ignore the "Takeover" Value of Preferred -- The Realistic Range of Possibilities Depends on Who the Investors Are -- Overstating Returns and Understating Returns on the Same Asset (Simultaneously) -- What Happens to Fund IRRs When You Assume Book Value Equals Market Value? -- The Real Cost of Fair Value, Fair Market Value, and Enterprise Value -- Yahoo! Case -- Chapter 6 Why You Should D.O.W.T. (Doubt) Venture Capital Returns-Option Pool Reserve -- Unissued Option Pools -- Value Conclusion Elements Impacted by Option Pool Reserve Assumptions -- Impact on Parties Relying on Assumptions of VC Investments -- Chapter 7 If Valuation Can't Make You Money, Do You Really Need It?: Learning Practical Applications from Kayak.com -- Applying Studies to Real-World Cases -- Important Questions to Ask -- Summary -- Chapter 8 Don't Hate the Appraiser (Blame the Auditor Instead) -- Interview with Jeff Faust, AVA -- Summary -- Chapter 9 Don't Blame the Auditors (Blame the Practice Aid Instead): 409A Valuation Professionals Discussing Topic 820 (FAS 157) with VC CFOs -- Introduction to the Expert Panelists -- The Auditor's Valuation "Bible" -- SAS101 Tests, PWERMS, and OPMs -- PWERMS and rNPV/eNPV Models -- Subjectivity and the PWERM (or "Power") Method -- Finding Inputs for the OPM Model -- Enterprise Values versus Allocations -- Next Round Pricing and Topic 820 -- Different Ways of Treating Granted, Unvested, and Reserved Options -- Valuing Warrants in Venture-Backed Companies.

Quantifying Qualitative Inputs to Value Conclusions for VC-Funded Companies -- Discounts for Lack of Marketability (DLOM) and Venture-Fund Portfolios -- Sharespost, SecondMarket as Market Inputs -- Summary -- Chapter 10 Now That You Understand Venture Capital Valuation, Share It -- About the Author -- Index.