Presentation #2

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CROWDFUNDING & THE JOBS ACT:
THE IMPACT ON STARTUP VALUATIONS
Emerging Enterprises Committee
Monthly Webinar
July 7, 2014
Efrat Kasznik, Founder & President
Foresight Valuation Group, LLC
Outline
Startup Valuation Trends
 Factors Affecting Startup Valuations
 Startup Valuations and Crowdfunding

 Rewards-Based
Campaigns
 Equity-Based Fundraising
Foresight Valuation Group © 2014
2
What’s In a Billion Dollars?
Foresight Valuation Group © 2014
3
Key Performance Indicators (KPI):
The New Valuation Fundamentals
KPI = Measurable Success Factors
User Engagement - active users
 # of Installs
 Customer Acquisition Cost (CAC)
 Customer Lifetime Value (LTV)
 Average Revenue Per User (ARPU)
 Customer Attrition (Churn Rate)
 Conversion Rate (funnel)

Foresight Valuation Group © 2014
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High Startup Valuations in 2013
Raised $50M at ~$2B Valuation (Dec 2013)
$123M raised to date
60M installs, 30M active users monthly
16.5M users and 350M photos shared daily
$0 Revenues
Raised $225M at $3.8B Valuation (Oct 2013)
$338M raised to date
70M active users
$0 Revenues
Foresight Valuation Group © 2014
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Factors Contributing to High Valuations
More Exits
In 2013
•
•
•
230 IPOs; $55B US
10k M&As deals; $100B US
Active Secondary Market
Nest Labs
•
•
•
•
More
Funding
Options
Angels
VCs
Private Equity
Crowdfunding
User
Engagemen
t
$3.2B Valuation
•
•
•
Foresight Valuation Group © 2014
Healthcare
Internet of Things
Social Media
High
Growth
Industries
6
•
•
•
•
# Active Users
# Installs/Subscriptions
Conversion Rate
Churn Rate
The Startup Valuation Timeline
Crowdfunding
Available Information
High
Low
Seed
Funding
Foresight Valuation Group © 2014
Series
A, B, C
Stock
Options
7
M&A
IPO
Reward v. Equity Based Crowdfunding:
Valuation Considerations
REWARDS
EQUITY
Business Model
Validation
Creates Early Stage
Comparables
Foresight Valuation Group © 2014
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Rewards Based Crowdfunding:
Key Assumptions Validation
Customers
Team
Production
Profit
Foresight Valuation Group © 2014
Fulfillment
9
Equity-Based Crowdfunding:
Startups Valuations Revealed
Public Financial Database
Seed Funding Valuations
409A Valuations
Employee Stock Options
Financial
Statements
Valuation
Business
Plan
Foresight Valuation Group © 2014
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Seed/Angel Funding:
Median/Mean Round Size
Source: Halo Report 2013
Foresight Valuation Group © 2014
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Seed/Angel Funding:
Pre-Money Valuation Range
Source: Halo Report 2013
Foresight Valuation Group © 2014
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More Transparency Leads to Higher Prices?
Ratio of Common Stock to Preferred Stock Prices
??
25-30%
10%
Pre-2005
Foresight Valuation Group © 2014
Post 409A (1/1/2005)
13
Post JOBS Act (End of 2014?)
THANK YOU!
Efrat Kasznik
President, Foresight Valuation Group
[email protected]
Office: 650-561-3374
www.foresightvaluation.com
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