When we make a venture investment, we're looking forward. We have a view of what this company could become. What needs to happen. What could go wrong. How big it could get. How long it might take. And ultimately, what a successful outcome could look like. In its simplest form, we're forming a view on three things: The probability, timing and potential size of an exit. Let's call it PTSE™ (trademark pending 😄). There's nothing particularly new about it. In many ways, it's wha

There are two distinct stages in the venture valuation process, and they often involve different players. Stage 1: The Qualitative Assessment - Milestones and Calibration This is primarily the domain of the deal or investment team. They are closest to the company. They attend board meetings, speak with management and receive regular updates. They know what was expected at the time of the last financing and what has actually happened since. This is where milestones and calibra

In a previous article, (linkedin.com - the Hardest Stage in Venture Capital Fair Value) I discussed what I believe is one of the hardest challenges in venture capital fair value: valuing a company that has not raised capital for a considerable period of time. But behind that challenge lies a broader question: What are we actually trying to understand when we value a venture-backed company? At its core, a venture investment is based on a journey. A company starts with an idea