Read the "Outreach Networks: First Venture Round" case and answer the following questions: (1) What was the disagreement between the founder and venture capitalist? What might explain the differences in the valuation of ORN? (Think about the key assumptions / inputs used in the venture capital model) (2) Use the following assumptions and apply the "First Round Single Stage" venture capital model to estimate % of new shares, # of new shares to VC, price per share, pre-& post-money valuation. Show your modeling work in Excel. Which party's valuation is justified? Founder or VC? VC required a target rate of return of 50% and expected to exit at year 2017; APKT& ARUN were selected as the appropriate comparables An illiquidity / lack-of-marketability discount of 25% was applied to the average forward P/E of selected comparables to account for the non-marketability of this startup's equity shares. P/E multiple at Exit = average forward P/E x ( 1-DLOM) (3) (Challenge-Yourself Question, not required, For fun and you will earn bonus points for good work) Could you come up with the appropriate assumptions and inputs to justify VC's valuation. Hint: consider using the EV/EBITDA multiple A good understanding of venture valuation and what might cause the differences is critical in venture capital investing and could help at the negotiation table. Read the "Outreach Networks: First Venture Round" case and answer the following questions: (1) What was the disagreement between the founder and venture capitalist? What might explain the differences in the valuation of ORN? (Think about the key assumptions / inputs used in the venture capital model) (2) Use the following assumptions and apply the "First Round Single Stage" venture capital model to estimate % of new shares, # of new shares to VC, price per share, pre-& post-money valuation. Show your modeling work in Excel. Which party's valuation is justified? Founder or VC? VC required a target rate of return of 50% and expected to exit at year 2017; APKT& ARUN were selected as the appropriate comparables An illiquidity / lack-of-marketability discount of 25% was applied to the average forward P/E of selected comparables to account for the non-marketability of this startup's equity shares. P/E multiple at Exit = average forward P/E x ( 1-DLOM) (3) (Challenge-Yourself Question, not required, For fun and you will earn bonus points for good work) Could you come up with the appropriate assumptions and inputs to justify VC's valuation. Hint: consider using the EV/EBITDA multiple A good understanding of venture valuation and what might cause the differences is critical in venture capital investing and could help at the negotiation table