18
Business Formation, Growth, and Valuation
©Tibor Bognar/Corbis Images
Learning Objectives
Explain why the choice of organizational form is important, and describe two financial considerations that are especially important in starting a business.
Describe the key components of a business plan and explain what a business plan is used for.
Explain the three general approaches to valuation and value a business using common business valuation approaches.
Explain how valuations can differ between public and private companies and between young and mature companies, and discuss the importance of control and key person considerations in valuation.
On October 5, 2010, managers of Planet Ventures II, LP, a venture capital fund, announced that they were investing $4.8 million in Auro Mira Energy Company Private Limited. Their investment would be part of a $21 million second round (the company had successfully raised venture capital once before) of venture capital funding for Auro Mira. Other ...
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