A Framework for Valuation and Portfolio Optimization of Venture Capital Deals with Contractual Terms

Table 3

Estimation of startup cash flow.

Startup	Probability function	Parameters	Cash flow
			Zero year	First year	Second year	Third year	Fourth year	Fifth year
Deal 1	Uniform	Worst case	−30	0.66	0.75	0.8	0.83	0.85
		Best case		3	12	20	30	42
Deal 2	Uniform	Worst case	−35	0.5	1.52	1.75	1.4	1.2
		Best case		2	10.5	28	35	42
Deal 3	Uniform	Worst case	−50	2	2	2	1.8	2
		Best case		8	18	32	45	72
Deal 4	Uniform	Worst case	−80	0	5.15	5.33	3.5	7.4
		Best case		18	26	48	48	185
Deal 5	Uniform	Worst case	−75	15	7	3.67	3.06	1.2
		Best case		60	63	60	50.3	43.2
Deal 6	Uniform	Worst case	−50	0.3	0.875	1.4	1.16	1
		Best case		3	14	35	42	49
Deal 7	Uniform	Worst case	−30	0.66	0.75	0.8	0.83	0.85
		Best case		3	12	20	30	42
Deal 8	Uniform	Worst case	−40	1.3	1.5	1.6	1.5	1.71
		Best case		12	24	40	54	84
Deal 9	Uniform	Worst case	−95	3	3.25	3.2	2.3	5.2
		Best case		18	52	80	84	259
Deal 10	Uniform	Worst case	−94	10	5.25	2.94	1.71	1.02
		Best case		90	48	73.5	61.8	50.4