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Owner valuation:
on
What is the payoff?
A conversation between an angel investor and founder(s)
Need an example?
If
pre-money valuation
is
$
M
...
Owner
share:
%
investing
$
M
...
returns
$
Million
$
M
owner equity
Total equity value
$
M
These returns represent a
x
cash on cash return
and an
IRR
of
%
.
over
years...
(
%
investor share)
(vs
% owner share)
Financial projections
Revenue multiple:
x
Straight line
Exponential curve
Adjusted by year
EBITDA Multiple
x
Constant:
%
of rev
adjusted by year