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Practitioners’ Insights: Convertibles and Early Stage Valuations

Jun 18, 2020 8:00 am 9:00 am

With early stage companies accounting for a large part of the aggregate PE/VC funding in India, it is imperative to understand the choice of instruments these companies use and also to be able to value these instruments appropriately.

This webinar will focus on understanding the key terms of the convertible preference shares (CPS) that VCs use. The session will also demonstrate the use of an option pricing approach to better understand the valuation of early stage companies.

Learning outcomes:
1. Why do VCs invest through CPS in early stage companies?
2. What are the special rights attached to CPS?
3. How does one value these instruments?
4. What happens in down cycles to the various rounds of CPS—do they decline in value proportionately?
5. How does one use option pricing for the valuation of such instruments?

Note: Members, please go through the following refresher reading on private equity valuation. This webinar contains some content on best practices applicable to Indian markets.

hosted by CFA Institute