In another question to the Discount & Cap Rates experts, a listener asked: “What studies do you employ for early-stage company valuations?”
Answered panelist Gary Trugman, “The one study I’ve used a number of times over the years is the QED Report on Venture Capital Financial Analysis, by James Plummer. That was a 1987 study,” he adds, “but I think there’s a lot of really good data there.”
But alas, Plummer’s book appears to be out of print. We’ve put out a request to the author (at QED Research, Inc.) to help track down copies. In the meantime, Professor Josh Lerner at Harvard Business School has compiled one of the most current, comprehensive bibliographies on venture capital as well as private equity analysis, available here.
Professor Lerner also offers that the new textbook by Wharton’s Andrew Metrick, Venture Capital and the Finance of Innovation (Wiley, September 2006) is definitely worth checking out, as it covers the relationship between risk and return in venture capital, historical statistics on V.C. investment performance, total and partial valuation methods and data, and more (available at Amazon.com and most online sellers).
For those who’re riding the current PE boom, “I also have a short note on private equity valuation,” Lerner says, which is a top-seller at Harvard Business online.
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