Valuations of Early-Stage Companies and Disruptive Technologies

Beschreibung

This book will serve as a practical guide for entrepreneurs and investors/advisors in constructing and understanding valuations of startups in rapidly shifting industries, including the areas of drug development, medical devices, cyber security, and renewable energy. For large companies, valuation is based on forecasts of free cash flow; in technologically-driven industries, product pipelines can represent a large part of market capitalization. The situation is even more critical for small companies committed to a single idea: all of their value is linked to a single project. Any business transaction or internal proposal to begin or terminate an R&D project in which innovative projects are being valued or exchanged requires a realistic valuation of those projects. Moreover, different projects have very different dynamics. Pharmaceuticals have very large lead times and are dependent on patents as well as out-licensing agreements. In contrast, software develops very quickly, and IP ishard to value. This book will be a guide to building appropriate valuations for companies competing in rapidly shifting industries and offering products under new business models where little precedent exists, taking both financial and behavioral issues into consideration.

Autor*in

Tiran Rothman

Themen in »Valuations of Early-Stage Companies and Disruptive Technologies«

Disruptive Technologies Start-up Valuation Valuing disruptive start-ups cybersecurity companies biotech projects Early stage valuations investor/entrepreneur behavior Disruptive industries discounted cash flow corporate value equity valuation innovative companies pharma companies

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“Tiran Rothman has written a must-read practical book for any technology firm or investor who wishes to acquire an in-depth understanding of the valuation process of tech companies.” (David Frigstad, Chairman, Frost & Sullivan)“Psychological aspects of decision making are playing an increasing role in economic modeling and valuation, adding positive elements to the traditional approach based on the standard economic assumptions of rationality. Tiran Rothman book will guide investors and analysts with this exact convergence of behavioral economics and valuation for early-stage firms, where cognitive bias may play a significant rule.” (Itzhak Venezia, Professor of Finance (Emeritus), Hebrew University, Israel; Editor of Behavioral Finance: Where do Investors Biases Come From?) “Tiran Rothman’s book highlights the excitement around the surge of theoretical and practical work in behavioral finance. A variety of readers are targeted with this book—lay people that seek to better understand how to analyze early-stage companies and practitioners interested in applying psychological aspects when they construct and value new securities.” (Joakim Westerholm, Professor of Finance, University of Sydney Business School, Australia) “Tiran Rothman has written a path-breaking book on financial valuation firmly grounded in the latest research on behavioral finance and investor psychology. He goes far beyond abstract theory and shows practically how to value early- and mid-stage firms in R&D-heavy sectors like the life sciences. The book includes a plethora of examples of valuing real-world startups. Tiran’s work is an indispensable guide for students and practitioners of valuation alike. Highly recommended!” (Joshua Mitts, Associate Professor, Columbia University)
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