Funding new ventures: Valuation financing and capitalization table

FUNDING NEW VENTURES: VALUATION, FINANCING AND CAPITALIZATION TABLE
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Funding New Ventures: Valuation, Financing and Capitalization Table
Most entrepreneurs care so much about the return that they get from an undertaking. They usually care about the percentage of a company they get. This is the valuation process. The bigger the percentage shares the more say they have in a company. For an investor, the internal rate of return plays a vital role to their advantage. If they make assumption from experience (investors) on internal rate of return, the assumption may yield positive returns to them. In new ventures it is likely that the internal rate of return may be the same as the proportion contributed by the investors. For the investors to have a high proportion of returns, they are supposed to consider the business that will bring forth positive economic returns. This can be achieved through: one, commencing a business that requires low capital. This can be so as the business can be of the nature that requires little capital or the business can after initial investment be able to generate further investments. Second, the investors can invest in the business that requires naturally requires huge capital but can operate by the use of debts. Third, they can start a business that requires huge capital but the returns that are expected will also be high.
Implied valuation is the situation is where there value of a business is done after the investors have pumped their finance into the business. T...