It is easy to observe the strong trend toward earlier
exits at valuations under $ 30 million.
Not exact matches
First Round based its performance evaluations on the difference in a company's
valuation between the VC firm's initial investment and current fair market value for the company or value
at the time of an
exit.
In 2014 3 out of 12
exits were occurred
at a lower
valuation than the previous round.
This allows the Shark to meet the
valuation «ask» of the entrepreneur and VC board member, all the while knowing that they will make excellent returns, even
at exits that are far below the cover
valuation.
The bottom line: with the unicorn bubble likely to go bust over the next 12 — 24 months, less than 1/4 of today's unicorns are likely to achieve a successful
exit for their investors
at a $ 1 billion +
valuation.
Despite recent hype around a handful of venture - backed companies raising money
at multi-billion dollar
valuations, achieving a more than $ 1b
exit for a startup is highly unlikely.
A decline much more than 2 % below that average could provoke coordinated
exit attempts by trend - followers,
at valuations nowhere near the point where value - conscious investors would be eager to absorb those shares.»
Rather, they're interested in pumping up enough hype and
valuation to find a quick
exit through an acquisition
at an eye - popping premium.
For example, assume an
exit valuation of $ 100 million and the VC owns 20 % of the company
at the time of the
exit.
To determine a value for an early - stage business, most VCs use two
valuation methodologies: recent comparable financing, and potential value
at exit.
Given that a favorable shift in the quality of market action
at these
valuations would prompt us to remove perhaps 25 % of our hedges, the «best case» benefit from an exposure to market fluctuations here, even assuming a perfect
exit, would probably be just 2 - 3 %.
Once
valuations are rich and our broad return / risk estimates are negative, our willingness to accept market risk generally requires a window with two
exits — one below,
at the point where the trend - following measures deteriorate, and one above,
at the point where overvalued, overbought, overbullish conditions emerge.
IKAN is still trading
at a discount to both its net cash and liquidation
valuations, so it's difficult to
exit when the possibility of additional upside is good.
With the stock price
at $ 0.51, we're going to maintain our position for now, but we're mindful that NENG is a perennial net net stock and so we might take the opportunity to
exit if it gets to our target
valuation of $ 0.55.
We are
exiting our position in Amtech Systems Inc (NASDAQ: ASYS)
at its $ 5.65 close yesterday because the stock is trading
at a substantial premium to our
valuation.
The business, fundamentals and dividend growth potential appear sound
at this time, while the
valuation has dipped due to short - term investors
exiting based on one quarter's missed estimates.