Read PowerWater Beverages, Inc. case. A copy is in the Modules section “Week 12”
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Based on the information you find in the case material and the techniques you have learned in this course, please provide a pre-money valuation and a post-money valuation for PowerWater Beverages, Inc. You must tell me the techniques you will use up front, show your initial calculations, and explain your findings. Submit through Canvas.
Understand that the addition of a chunk of money into any company’s account immediately makes it more valuable. If we value Google at $1 billion and then we throw $1 million dollars into their bank account, then the value of Google has immediately increased by $1 million. Similarly, growing businesses are valued at a pre-money valuation in order to establish most of the deal terms and the post-money valuation becomes the pre-money valuation plus the amount of money invested in the company. It is important to establish both numbers and understand which number you are discussing when negotiating with an investor.
For this assignment, you must use multiple techniques to establish a valuation for PowerWater Beverages (each technique will give you a different valuation), decide how much to weigh the result of each technique, and establish a final pre and post-money valuation.
Pre-money valuation and explanation – 5 points
Post-money valuation and explanation – 5 points
Explanation of techniques, calculations, and correct use – 10 points
- Techniques that will be used
- name of technique
- explanation of process
- explanation of result