Venture Capital Contract Pricing Model
In this chapter, the author identifies the types of options embedded in VC contracts and shows how they can be priced while accounting for interaction effects. To facilitate the analysis, the terms are categorized into three groups, depending on the type of option parameters that they influence. The groups are first analyzed separately (in Sections 3.1 to 3.3) and then integrated into a comprehensive model (in Section 3.4).
KeywordsPortfolio Company Optional Conversion Prefer Stock Common Share Prefer Share
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