Valuations of Early-Stage Companies and Disruptive Technologies: How to Value Life Science, Cybersecurity and Ict Start-Ups, and Their Technologies

ISBN-13: 9783030388461 / Angielski / Twarda / 2020 / 219 str.

Tiran Rothman; Daniel Grunstein

Spis treści

Part I A Short Overview of Valuations

1 Introduction

2 Understanding Financial Valuations: Foundations and Basic Traditional Techniques

Part II Overcoming Valuation Hurdles: How to Conduct Valuations Under Unique Circumstances

3 Understanding the Basic Elements of Stockholder Statements and Their Use in Valuations

4 Valuation Methods: The First Chicago Venture Method and the Use of Real Options

Part III Behavioral Factors: How Psychology Affects Bias in Valuations

5 Introduction to Behavioral Finance​

6 An Overview of Investor Behavior in Financial Markets and Psychological Influences on Valuations

7 How to Overcome Investor Behavior and Psychological Influences in Valuations: How to Evaluate a Dream?

Part IV An Introduction to Valuations in R&D- Intensive Industries

8 The Pharmaceutical Sector

9 Life Sciences: Disrupting Biologic Drugs Manufacturing

10 An Overview of the Cybersecurity and the Renewable Energy Sectors

Part V Actual Valuations

11 Company A: Pharmaceutical/New Compounds

12 Company B: Pharmaceutical/Biologics

13 Company C: Cybersecurity

14 Company D: Renewable Energy

15 Conclusion

Appendix A: Capitalization Rate for Renewable Energy Firms

Appendix B: Capitalization Rate for Software Firms

Index

O autorze

Tiran Rothman has over a decade of experience in financial consultancy and academic and applied research in behavioral finance and economics. As a vice president of Frost & Sullivan, he leads the largest private financial valuation program for high-tech companies and the Tel Aviv Stock Exchange Equity Research Program, involving pharmaceutical, biotechnology, medical device, ICT, renewable energy, autonomous vehicle and cybersecurity companies. He previously served as the Chief Economist of AMPAL (NASDAQ: AMPL). Tiran is also an Assistant Professor at the WIZO Academic Center Haifa in Israel. He holds a PhD in Behavioral Economics from the University of Haifa, an MBA in Finance from IDC Herzliya and was a visiting fellow at New York University’s Stern Business School. He has published widely in the field of behavioral finance and has been the recipient of numerous research grants and scholarships.

Blurb

This book will serve as a practical guide for entrepreneurs and investors/advisors in constructing and understanding valuations of startups in rapidly shifting industries, including the areas of drug development, medical devices, cyber security, and renewable energy. For large companies, valuation is based on forecasts of free cash flow; in technologically-driven industries, product pipelines can represent a large part of market capitalization. The situation is even more critical for small companies committed to a single idea: all of their value is linked to a single project. Any business transaction or internal proposal to begin or terminate an R&D project in which innovative projects are being valued or exchanged requires a realistic valuation of those projects. Moreover, different projects have very different dynamics. Pharmaceuticals have very large lead times and are dependent on patents as well as out-licensing agreements. In contrast, software develops very quickly, and IP is hard to value. This book will be a guide to building appropriate valuations for companies competing in rapidly shifting industries and offering products under new business models where little precedent exists, taking both financial and behavioral issues into consideration.