Determining fair value of any company is essential to take appropriate investment decisions. In the first lecture of this chapter, we will be reviewing the relation valuation methods of market approach and more specifically the Berkus method, the Comparable transaction method (CTM), the Precedent transaction method (PTM) and the scorecard valuation method.

In this second lecture about determining a company's fair value we will be looking at discounted cash flows & future earnings, absolute valuation method. I will be explaining why it is a valid method, why it has to be discounted. At the end of the lecture, I will explain how to value a mature company vs an early stage company and how to adapt the timeline and cost of capital for both mature & early-stage companies.

In this last lecture about early-stage company valuation, I will sharing another category of valuation for these type of companies being the replacement cost approach. Through the examples of Meta (previously Facebook) and also the acquisition of Instagram by Facebook, I will explain when replacement cost approach (either minimum or maximum valuation) can be a valid alternative to income & market approaches.

In this lecture I will introduce you to the concept of raising capital through equity investments and how it impacts the increase in book value of the early-stage company. Through concrete calculations we will also practice how equity dilution works and if/when it can be positive or negative for existing owners.

Debt investments are another way of increasing the available capital of a company including early-stage companies. We will discuss why investors may prefer debt investments vs equity investments and also enumerate the 3 main types of debt investments. The lecture will close with an explanation about hybrid investments and we will practice with a concrete example where convertible debt (being a hybrid instrument) may put minority shareholders into a difficult voting right situation.

In this last lecture of Chapter 3 I will introducing you to important corporate constitution and corporate law elements like articles of constitution, shareholder agreement and term sheet. I will try through concrete examples extracted from real shareholder agreements and term sheets to demistify what type of provisions you may find in those documents and the reasoning behind it.

In this final lecture, we will take a step back and review from the beginning the most important elements discussed in this course and why the specific order of valuation before fundraising has been chosen.