Valuation Of Start-up Enterprises From The Angle Of Venture Capital

"The guiding opinions of the state council on actively promoting the" Internet+"Action" advocates that it is necessary to give full play to the leading role of venture capital under the environment of "Internet+".It also calls up to lower the entry barriers for start-ups in the internet industry.In combination with the revision of the securities laws and the reform of the stock issuance system,the environment supports those Internet-based start-ups that have strong potential for growth but are not yet profitable to be listed on the GEM..It opens a new way for venture capital firms to invest in start-up enterprises.In this paper,we evaluate the value of Venture Capital Ventures,and propose a more feasible venture capital investment model based on the phased characteristics of Venture Capital.The results show that different attributes of investment capital will lead to different necessary returns required by investors,which leads to different remaining values for entrepreneurs after deducting the necessary returns required by investors.At the same time,the capital structure of start-ups will be different at different stages.In this paper,normative research and case study are combined to build a staged venture capital value evaluation model based on binary tree.First,use the P/E ratio method to evaluate the IPO value of the start-up enterprise.Then use the calculation result as the node value of the binary tree.Secondly,the node value is discounted at a discount rate(the rate of return requested by the investor)using the binary tree method.Then the final value obtainable by the entrepreneur is calculated after deducting the necessary return required by investors.Thirdly,according to the value that the entrepreneur can obtain after deducting the necessary return of the investor's request and the capital invested by the venture capital investor in each period,the paper analyzes the capital structure of the entrepreneur in different development periods.Finally,in order to verify the correctness and rationality of the model,the actual case is used for calculation and analysis.The main innovation of this paper is to study the impact of different attributes of investment capital on the ultimate value obtainable by the entrepreneur.From the perspective of financing cost,the value assessment results are revised.The conclusions of this paper are as follows:First,the value of a start-up enterprise does not change because of the financing plan,that is,the development of a start-up company has nothing to do with the financing plan,and the financing plan will not affect the expected rate of return and development of the start-up enterprise.Second,from the perspective of venture capital investors,different attributes of investment capital makes them require different rates of return,which results in different returns required in each period.Third,from the perspective of venture capital financing,different financing instruments makes venture capital companies have different financing costs,leading to differences in the value that entrepreneurial entrepreneurs can obtain after deducting the necessary returns from investors.Fourthly,according to the phased characteristics of venture capital,we suggest a more reasonable valuation method,that is first use the P/E method to evaluate the value as the binary tree node value,and then use the binary tree method for discount calculation.