Details

Valuations of Early-Stage Companies and Disruptive Technologies

How to Value Life Science, Cybersecurity and ICT Start-ups, and their Technologies

von: Tiran Rothman
50,28 €
Verlag:	Palgrave Macmillan
Format:	PDF
Veröffentl.:	27.11.2020
ISBN/EAN:	9783030388478
Sprache:	englisch

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Beschreibungen

Titelbeschreibung

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.

Inhaltsverzeichnis

Part I. A Short Overview of Valuations.- Chapter 1. Introduction.- Chapter 2. Understanding Financial Valuations and Basic Traditional Techniques.- Part II. Overcoming Valuation Hurdles: How to Conduct Valuations Under Unique Circumstances.- Chapter 3. Understanding the Basic Elements of Stockholder Statements and their Use in Valuations.- Chapter 4. Valuation Methods: The First Chicago Venture Method and the Use of Real Options.- Part III. Behavioral Factors: How Psychology Affects Bias in Valuations.- Chapter 5. Introduction to Behavioral Finance.- Chapter 6. An Overview of Investor Behavior in Financial Markets and Psychological Influences on Valuations.- Chapter 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.- Chapter 8. The Pharmaceutical Sector.- Chapter 9. Life Sciences: Disrupting Biologic Drugs Manufacturing.- Chapter 10. An Overview of the Cybersecurity and the Renewable Energy Sectors.- Part V. Actual Valuations.- Chapter 11. Company A: Pharmaceutical / New Compounds.- Chapter 12. Company B: Pharmaceutical / Biologies.- Chapter 13. Company C: Cybersecurity.- Chapter 14. Company D: Renewable Energy.- Chapter 15. Conclusion.

Autorenportrait

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.

Back cover copy

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 ishard 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.

Sonderbeitrag

Simplifies the mathematical and economic techniques employed in corporate valuations in general, and those for ventures at developmental and early-growth stages Draws on a number of interdisciplinary insights when evaluating early-stage ventures, specifically psychological insights into investor/entrepreneur behavior at different intervals throughout the valuation process Explores circumstantially specific valuation conundrums and how to treat these analytically

Unpublished endorsement

“Tiran Rothman has written a must-read practical book for any technology firm or investor who wishes to acquire an in-depth understanding of the valuation process of tech companies.” (David Frigstad, Chairman, Frost & Sullivan)“Psychological aspects of decision making are playing an increasing role in economic modeling and valuation, adding positive elements to the traditional approach based on the standard economic assumptions of rationality. Tiran Rothman book will guide investors and analysts with this exact convergence of behavioral economics and valuation for early-stage firms, where cognitive bias may play a significant rule.” (Itzhak Venezia, Professor of Finance (Emeritus), Hebrew University, Israel; Editor of Behavioral Finance: Where do Investors Biases Come From?)

“Tiran Rothman’s book highlights the excitement around the surge of theoretical and practical work in behavioral finance. A variety of readers are targeted with this book—lay people that seek to better understand how to analyze early-stage companies and practitioners interested in applying psychological aspects when they construct and value new securities.” (Joakim Westerholm, Professor of Finance, University of Sydney Business School, Australia)

“Tiran Rothman has written a path-breaking book on financial valuation firmly grounded in the latest research on behavioral finance and investor psychology. He goes far beyond abstract theory and shows practically how to value early- and mid-stage firms in R&D-heavy sectors like the life sciences. The book includes a plethora of examples of valuing real-world startups. Tiran’s work is an indispensable guide for students and practitioners of valuation alike. Highly recommended!” (Joshua Mitts, Associate Professor, Columbia University)