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Assessing the Economic Value of Venture Capital Contracts

An Option Pricing Approach

  • Authors
  • JilĀ CarolineĀ Onimus

Table of contents

  1. Front Matter
    Pages i-xv
  2. Jil Caroline Onimus
    Pages 1-25
  3. Jil Caroline Onimus
    Pages 27-57
  4. Jil Caroline Onimus
    Pages 59-120
  5. Jil Caroline Onimus
    Pages 121-137
  6. Jil Caroline Onimus
    Pages 139-142
  7. Back Matter
    Pages 143-153

About this book

Introduction

Jil C. Onimus makes a contribution to the nascent research line on the economic value of venture capital contracts which lies at the intersection of venture capital contract design and real option pricing. She identifies the baskets of real options embedded in model venture capital contracts as published by the National Venture Capital Association (NVCA) and shows how they can be priced in interaction using Least Squares Monte Carlo simulation. The pricing model is calibrated by means of a dataset of deal terms in Silicon Valley as well as industry statistics from the NVCA. By applying the model to standard investment scenarios (multiple financing rounds with multiple investors), the author obtains estimates of option values for individual terms and for full contracts with interaction effects.

Keywords

Effective Company Valuation Least Squares Monte Carlo Simulation Private Equity Real Option Baskets Shareholder Agreements

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-8349-6619-3
  • Copyright Information Gabler Verlag | Springer Fachmedien Wiesbaden GmbH, Wiesbaden 2011
  • Publisher Name Gabler
  • eBook Packages Business and Economics
  • Print ISBN 978-3-8349-2812-2
  • Online ISBN 978-3-8349-6619-3
  • Buy this book on publisher's site