Scribd
Upload
27 views3 pages

Bearbuilders Problem

The document outlines financial projections and metrics for a firm over a five-year period, including required amounts, EBITDA, cash balances, debt, and equity values. It provides details on various funding options such as convertible debt and redeemable preferred equity, along with their respective IRRs and ownership percentages. Additionally, it includes cash flow projections and valuations at the end of year five, highlighting the firm's expected growth and investment returns.

Uploaded by

Akash Jain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
27 views3 pages

Bearbuilders Problem

The document outlines financial projections and metrics for a firm over a five-year period, including required amounts, EBITDA, cash balances, debt, and equity values. It provides details on various funding options such as convertible debt and redeemable preferred equity, along with their respective IRRs and ownership percentages. Additionally, it includes cash flow projections and valuations at the end of year five, highlighting the firm's expected growth and investment returns.

Uploaded by

Akash Jain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Amount required 500000

EBITDA at end of 5 years 1050000


Cash balance 200000
Debt 1000000
EV 6300000
Equity value 5500000
IRR 45%
VCs required equity value 3204867
1 % ownership 58.27%

Post money Investment value of Firm’s equity 858069.9 dollars


Premoney investment value of firm's equity 358069.9 dollars

2 Convertible debt 500000


IRR 35%
Interest 10% 0 1 2
Venture capital CFs -500000 50000 50000
Conversion value
Total CFs -500000 50000 50000
IRR 35%
Equity value end of year 5 5500000
% ownership 31.59%

3 Redeemable preferred equity


Dividend rate 8%
Capital received from VC 500000
% ownership 40% 0 1 2
VC Cash flows -500000 40000 40000
Redeemed value
Warrants (Common stock) exercise price
Value of shares (common stock)

Total CFs -500000 40000 40000


IRR 43.76%
3 4 5
50000 50000 50000
1737210
50000 50000 1787210

3 4 5
40000 40000 40000
500000
-100000
2200000

40000 40000 2640000


Funding from VC 2000000
ROR 40%
Horizon 5
Preferred Dividend 8%
0 1 2 3 4 5
Cash flows (VC) -2000000 160000 160000 160000 160000 160000
Conversion value 8990483
Total CFs -2000000 160000 160000 160000 160000 9150483
IRR 0.39958

EBITDA end of Year 5 6000000


EV/EBITDA multiple end of Year 5 5
EV end of Year 5 30000000
Interest bearing debt 3000000
Cash 300000
Equity value end of Year 5 27300000
% ownership 32.93%

You might also like