Breaking Into Wall Street – Venture Capital & Growth Equity Modeling 2024

WHY IT’S IMPORTANT: This training gets you up to speed quickly with startup evaluation and the analysis of deal terms and exit options – critical for all venture capital and growth equity roles.

You’ll complete 5 short case studies in this introductory training; each one is based on a company at a different stage in the lifecycle, such as Seed funding vs. Series A, B, C, and D rounds.

Through these case studies, you’ll learn how to evaluate deal terms for startup investments, assess their valuations, and determine if VC investors could plausibly earn their targeted returns multiples.

Each case study is based on a company in a different sector, ranging from AI to direct-to-consumer to SaaS and life sciences, so you’ll also understand the industry differences.

This entire section is designed to be a “weekend crash course,” so you quickly can learn the most important points without getting bogged down in minutiae.

WHY IT’S IMPORTANT: These lessons explain how to model and value a “small business” SaaS company based on a granular financial model with individual employees and customer contracts.

“Granular financial models” are the name of the game in venture capital and startups. If you can’t predict how much cash flow the company will generate in the next two quarters, how can you predict the amount of outside funding it might need to raise?

This case study walks you through the entire model, from revenue and expenses to the construction of “real” financial statements based on random and disorganized historical data (just like most startups in real life).

You’ll also learn to calculate and interpret key SaaS metrics, such as LTV / CAC, Gross and Net Retention, Payback Periods, and more.

The last few lessons cover private company valuation and all the adjustments and discounts you need to make in a DCF and valuation – and how these factor into your fundraising recommendations to the company.

WHY IT’S IMPORTANT: This training explains how to model and value later-stage companies and recommend the best exit option (M&A vs. IPO vs. SPAC), considering all the investor groups.

In this case study, you’ll learn how the analysis and valuation of a later-stage tech company differ from an early-stage one.

You’ll also learn how to model exit scenarios such as an IPO, a SPAC, and an M&A deal with a significant Earnout component and recommend the best one for the company’s short-term and long-term goals.

The last few lessons walk you through this company’s cap table and a flow-of-funds analysis, so you can see how the exit options affect the different investor groups and make a recommendation based on that.

WHY IT’S IMPORTANT: This module gives you practice with building a “real world” cap table based on messy financings, a down round, and ambiguous conversion and exit terms.

These lessons walk you through an advanced capitalization table with support for features such as convertible notes and venture debt, in addition to liquidation preferences and participating preferred stock.

You’ll learn how to model the conversions to common shares, how anti-dilution affects all the investors, and how to properly deal with options and warrants in an exit (including the circularity inherent in these calculations).

Finally, you’ll learn about the lenders’ perspective on the deal by calculating the returns to the venture debt firm responsible for an earlier funding round.

WHY IT’S IMPORTANT: This case study walks you through a full valuation of Ventyx as it attempts to raise follow-on equity, including drug-by-drug analysis.

These lessons break down the Sum-of-the-Parts DCF and valuation for biotech firms, from market research to revenue and cash flow estimates.

You’ll learn how to value each pipeline drug, risk-adjust for the probability of success, and then combine everything into a single corporate-level DCF that factors in net operating losses (NOLs) and tax savings.

In the final lessons, you’ll use this model to make an investment recommendation and support your findings with a quick analysis of the public comps and precedent transactions.