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VC Investing : Private Company Valuation & Participating Preferred Securities    

Event Description

​​Advanced Financial Analysis Series : 

VC Investing : Private Company Valuation & Participating Preferrred Securities (Module 3)

On 23 March 2018 (Fri)​

Eligible for FTS and Skills Future Claims


In the first part of this course, we discuss the complex nuances associated with analyzing and valuing emerging markets and private companies. We dive deep into the details and concepts deeply imbedded with valuation of large publicly traded and listed companies and take it to next level by applying it to companies and regions with very sparse publicly available data. Learn nuances of adjusting for DCF valuation, WACC analysis when no data exists, how to select and adjust peer comparables when no “good comp” exists. While there is certainly no magic bullet to the tough questions and lack of information, there are techniques and best practices to get us as close as possible. Learning objectives include: fundamental & DCF valuation nuances (adjustments to Gordon growth); WACC and cost of component capital nuances (adjustments to cost of debt and equity and beta); review of basic valuation methodologies, focusing on relative valuation multiples and ratios and tacking on private company discounts; emerging markets case study and real-life valuation nuances when data simply doesn’t exist.

The second part of this course involves modeling out early stage investment securities' waterfalls. When investing in earlier stage companies, whether start-up, growth or mezzanine stage investing, there is a fine balance between incentivizing the newest round of investors injecting capital and providing enough returns for earlier round investors, while still motivating management to strive for mutual alignment of economic interests. Investors desire downside protection while craving equity upside. Thus, the participating preference securities evolved from a blend of common stock with equity upside & voting rights to debt with accruing interest and priority of liquidation. In this course, learn how to structure, and model out such hybrid securities commonly used in VC and earlier stage investing.

Specifically, in our liquidation waterfall modeling, we will model out:

  • Modeling Preferred Equity and Multiple Class Share Positions: structuring returns for each equity participant and class/series of investors
  • Equity Assumptions: capitalization tables, pre-money vs. post-money calculations
  • Liquidation Preference: minimum return threshold based on pre-determined multiple and accrued dividends over time  provides LIFO effect of last dollar in, first dollar out
  • Dividends: Cash pay vs PIK; compounding vs simple; cumulative vs. non-cumulative
  • Participation Rights: investors shall participate on equity upside based on fully diluted ownership percentage  allows investors to participate in upside valuation after liquidation preference protection
  • Participation Caps: the crux of the analysis focuses on the capped upside of the investor and re-distribution of fully diluted ownership percentage for remaining investors – it gets complicated and that's why it's called a waterfall!
  • Conversion: complicate the analysis by adding in a conversion option for all investors to further participate in upside  could radically change the valuation parameters based on final valuation/liquidation amount
  • Management Options & Warrants: incorporate management options in allocation of final management proceeds based on cashless converts

Please note that this is a financial modeling class, not a legal class


Basic proficiency using Excel, a solid grasp of basic accounting fundamentals and an understanding of basic finance & valuation principles are required.

Bring your PC laptop with a working USB slot and Microsoft Excel installedMacs may not be as effective

Course fee :

CFA Singapore member :

S$880* per module (Early bird fee) / S$1,080* per module (Standard fee)

Non-member :

S$1,080* per module (Early bird fee) / S$1,280* per module (Standard fee)

*Price subject to 7%  GST

*10% off for signup of 2 or more modules per delegate​

* Early bird fee valid till   28 February 2018

Course fee includes :

Course materials, lunch & refreshments​

Event Type

Society; Educational

Education Topic

Financial Statement Analysis

Start Time

3/23/2018 9:00

End Time

3/23/2018 17:00





Event Country


Event Region

Asia Pacific

Location Info



Mr. Hamilton Lin, CFA

CE Credits


SER Credit




Member Price

S$880 (early bird fee) / $1080 (Standard fee) per module *Subject to 7% GST

Non-Member Price

S$1080 (early bird fee) / $1280 (Standard fee) per module *Subject to 7% GST

Candidate Price



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2018-03-21 to 23 Advanced Financial Analysis Series v1.pdf    
Content Type: MyCFA Calendar
Created at 1/12/2018 16:56 by EVENTMANAGEMENT@CFASINGAPORE.ORG
Last modified at 1/12/2018 18:21 by EVENTMANAGEMENT@CFASINGAPORE.ORG