How Investors Value Private Company
(Slide 30 of 50)
- Other practical factors that influence
The qualities of the security sold to the investor and the
non-financial terms of the investment influence value.
Convertible preferred securities are worth more than common
stock because they provide the investor with preferences and
the ability to convert into common stock. Liquidation
preferences, registration rights, information rights and other
terms favorable to an investor can remove issues that would
otherwise depress the investor’s valuation.
- Collateral. The
availability of collateral or methods to make the investment
more liquid can increase the price of company stock and make
other fund raising methods available.
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