Method for Valuing High-Risk Long-Term Investments: The Venture Capital Method Harvard Case Solution & Analysis

Describes a method for evaluation of high-risk, long-term investments, such as in front of venture capitalists. The method involves a prediction of the future value (for example, five years from now) and discounting that the ultimate cost to the present, using a high discount rate (eg 50%). Provides an explanation of the method, including a detailed discussion of the key determinants of factors, ranging from the discount rate on the final price. Pedagogical task is to make students aware of the issues related to the evaluation of the "futures" investment. Model, provided that further sheds light on the determinants of value. "Hide
by William A. Sahlman, Daniel R. Scherlis 52 pages. Publication Date: July 24, 1987. Prod. #: 288006-PDF-ENG

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Method for Valuing High-Risk Long-Term Investments: The Venture Capital Method

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