Equidam

JULY 23, 2025

Lack of Methodology or Standard: A vague clause (“valuations as determined by GP”) doesn’t specify how to determine value. Especially for early-stage startups, there are multiple methods one could use – cost basis, last round price, discounted cash flow, comparables, you name it. Choose your target return (ROI).

Discounted Cash Flow 64

Discounted Cash Flow Start-ups Marketability Comps 64

Equidam

APRIL 22, 2025

” [1] [2] [4] [15] [19] It estimates a future exit value (often based on projected earnings and industry multiples) and works backward, using the high ROI targets VCs require (due to portfolio risk), to determine what the company could be worth today to justify that future return. [15] Applying Discounted Cash Flow Valuation.

Discounted Cash Flow 52

Discounted Cash Flow Marketability Risk Premium Start-ups 52

Equidam

APRIL 22, 2025

The formula is Present Value (Post-Money Valuation) = Potential Exit Value / (1 + Required ROI)^n , where ‘n’ is the number of years to exit. [8] 8] , [2] Discounted Cash Flow (DCF) Methods: Concept: DCF is a cornerstone of traditional financial valuation. [11]

Discounted Cash Flow 64

Discounted Cash Flow Terminal Value Marketability EBITDA 64