University of Pennsylvania

ScholarlyCommons
Wharton Research Scholars Journal

5-1-2006

Valuation of Venture Capital Securities: An
Options Based Approach
A. Lloyd Thomas
University of Pennsylvania

This paper is posted at ScholarlyCommons. http://repository.upenn.edu/wharton_research_scholars/36
For more information, please contact repository@pobox.upenn.edu.

Wharton School

Valuation of Venture Capital Securities: An Options Based Approach
Disciplines

Business | Finance and Financial Management

This journal article is available at ScholarlyCommons: http://repository.upenn.edu/wharton_research_scholars/36

Valuation of Venture Capital Securities

1

Valuation of Venture Capital Securities
An Options Based Approach

Wharton Research Scholars
2005-2006

Investigator: A. Lloyd Thomas
Supervising Professor: Dr. Raffi Amit
Copyright © A. Lloyd Thomas, 2006

Valuation of Venture Capital Securities

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Table of Contents

Table of Contents................................................................................................................ 2
Introduction......................................................................................................................... 3
Venture Capital Financing Negotiations......................................................................... 3
Venture Capital Securities .............................................................................................. 6
Common Stock............................................................................................................ 6
Liquidation Preferences .............................................................................................. 6
Participation ................................................................................................................ 7
Participation Caps