London – February 16, 2021 – Knowing the Language and Understanding Different Terms aka “Things to know before signing the Term sheets”
In “Water Me Please” VC Finance and Fund Manager Expert Marc Bandemer outlines in a number of stages the whole process of the Capital raising process and in detail the important relevant stages. Key to this, at all times, is to actually understand in detail the terminology used by all the parties as this will give the promoters a detailed roadmap of where exactly they are in the process at any one time.
Right at the outset there is the Pre Money evaluation and then taking all the relevant data you provide, projections etc this will then logically lead to your Post Money Valuation i.e. what has happened and who is going to earn from what?
As the term suggests, the pre-money valuation is what the ‘Company’ is worth before any investment is made, while post-investment valuation is therefore after the investment. What happens in between? That’s when the haggling starts as most Investment managers will have their own experts who will attempt to calculate how much the Company is worth before the investment.
Key in all considerations regarding ‘Company’ valuations are the following:
Intellectual Property – Intellectual property can add huge value to a company, depending on what kind of intellectual property the entrepreneur brings to the company. If an entrepreneur is in the medical field and has intellectual property that can tackle otherwise incurable disease, then that property may add tremendous value to a company. Likewise, new technology that can simplify everyday tasks can be considered intellectual property. Intellectual property can refer to unique formulas or inventions that can improve life or industry.
Physical Property – Physical property includes equipment, machines and computer programs, etc.
Real Estate – Real estate can also add to a company’s pre-money valuation.
It goes almost without saying but perhaps this point can never be understated. It is essential at all times to obtain the best legal counsel you can possibly afford. At this stage it is not a good idea to try and cut corners or take short cuts.
Marc Bandemer brings to this guide a wealth of experience not only in his current role as Chairman of Integer Wealth Global but also a lifetime of advising numerous clients in raising millions of VC investment and project funding over the years.
It is very rare that guides like this come along and are available so freely. More information about Integer Wealth can be found here (https://www.integerwealth.global) and the guide itself can be downloaded free of charge by clicking here
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