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  "docSlug": "jarvis-valuing-pre-revenue-companies",
  "documentTitle": "Valuing Pre revenue Companies",
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  "notes": "The slide uses a step-by-step formulaic approach to demonstrate the VC valuation method.",
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      "kind": "framework",
      "text": "Post-Money Valuation = Terminal Value / Anticipated ROI = $60 million / 30x = $2 Million",
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      "text": "Pre-Money Valuation = Post-Money Valuation - Money (Invested Capital) = $2 Million - 0.5 Million = $1.5 Million",
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      "text": "Using the Simplified Venture Capital Method. So, if the terminal value of a company seeking seed/start-up capital is estimated to be $60 million and we assume the stage of the company is appropriate for investors to expect 30x ROI in year of harvest, then the post-money valuation of this company can be estimated at $2 million. If the required investment is $0.5 million, then the pre-money valuation would be $1.5 million. These calculations are shown in the following formulas:",
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      "kind": "paragraph",
      "text": "Summary: For the past decade or so, the average pre-money valuations of seed venture capital deals have been between $1.5 million and $2 million. Furthermore, my experience is that typical pre-money valuations for seed/start-up companies are between $1 million and $3 million. Higher pre-money valuations can be justified based on experienced management teams that have more valuable intellectual property and that achieve more milestones than companies with lower pre-money valuations.",
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      "kind": "title",
      "text": "Valuation of Pre-revenue Companies: The Venture Capital Method (continued)",
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