Cost Pay to Play Pre-Money Valuation Sales 
Both Sides of the Table
SEPTEMBER 29, 2009
Three reasons: There is a relative valuation between the price a VC pays and their expectations of what it will exit for in an IPO or trade sale. Also, it’s harder to pay a $30 million pre-money value on an unproved company when you see public companies with $100 million in sales trading for less than $20 million.
Tim Keane
JANUARY 12, 2010
It also assumes the entire value of the investment is captured for investors at a sale of the company in the time specified in the term-sheet. On the last line on page two of the workbook, you see the resulting returns to the entrepreneur with a variety of terms and valuations and assumptions. Let’s start at the end.
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