How Investors Value Private Company Stock 
(Slide 26  of 50)

• Higher company valuations translate into better deals for company founders and management. 
• For example, an investor who buys $1 Million worth of common stock in a company valued, post money, at $5 Million will receive 20% of the company’s common stock. One who buys the same value in a company valued at $4 Million will receive 25% of the company’s common stock.
• The absence of a public market in private company securities makes valuation more difficult and less precise.
• Acute needs for funding without fund raising alternatives can negatively impact valuation, the ability to raise funds, and the fairness of funding terms.

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