The Institute for Entrepreneurship Presents "Startup Valuation," a Lecture by Alessandro Angeletti
On October 4th, 2016, the JCU Institute for Entrepreneurship welcomed Alessandro Angeletti, Senior Investment Analyst for LVenture Group, to Professor Pulino’s Finance (FIN 301) class to give a lecture on “Startup Valuation.” Professor Pulino opened the lecture by explaining why startup valuation is such a crucial process. Startups, she explained, do not have a track record regarding growth, revenue or margins. Therefore, traditional analytic business tools do not work in assessing the value of a startup. This is where venture capital comes in. Venture capital, as Angeletti defined it, is an equity investment made in fast growing, high-risk companies, during the early stage of their development.
Angeletti then proceeded to explain how startups are selected by startup accelerators (such as LUISS EnLabs) and Venture Capital firms (such as LVenture Group). The first, and most important, aspect of a startup to be examined is the team. In fact, Angeletti said, a heterogeneous, skilled, and motivated team is a requirement to succeed in the extremely competitive and fast-changing startup environment. Other aspects include the scalability of the business, its competitive advantage, and the commitment to the growth of the business.
Once a startup is selected, Angeletti continued, the Venture Capital firm will provide not only money but also a panel of skilled advisors and an extensive professional network to maximize the startup’s chances of success. The objective, for a Venture Capital firm, is to both grant promising startups the needed funds for their growth and, once a startup is successful, to sell their equity shares in order to turn a profit.