tikfed

@spanishesk - Have you considered teaching , would be really cool if you could offer a crash course :-)

Spanishesk Wrote:
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> For binomial options, 2 period is the same as 1
> period, you just have to do an extra round of
> discounting....not sure if theres anything really
> else as far as tips.
>
> For the VC, once you get the first round down, the
> second round is easy
>
> 1) Find POST2 = Exit value/(1+rate of second
> round financing)^years from second round to exit
> 2) Find PRE2 = POST 2 - Investment made at time 2
> 3) Find POST 1 = PRE2/(1+ rate of first financing
> round)^years from now till second round of
> financing
> 4) Find PRE 1 = POST 1 - Investment.
>
> Now you have all the POST and PRE. Next, start at
> Time 1 to find new shares issued ad time 1
> 1) First, find F, which is investment/post
> 2) Multiply shares of owners * (f/(1-f)) to get
> new shares issed
> 3) Divide first investment made by new shares
> issued to get share price
>
>
> From here, you can now solve for the second round
> number and price of shares
> 1) Take the shares of teh owners, add the shares
> issued at the first round of financing.
> 2) Find the new F for time 2, which is Investment
> 2/POST2
> 3) Multiply total shares in part 1 by the
> (F2/(1-F2)) to get new additional shares for
> second round of financing
> 4) Divide Investment 2 by these new shares to get
> the price.
>
>
> Pretty much, you work backwards to time one, then
> forwards to get the final amount of shares and
> value per share issed for the second financing
> round.