EEE 4653 FINAL PAPER 2025/2026 QUESTIONS WITH
ANSWERS MARKED A+
✔✔Targeted equity investor ROIs (Early stage) - ✔✔Times: 4
ROI: 10x
Cap Range:$1.5 Mil- $3 mil
✔✔Targeted Equity Investor ROIs (Venture) - ✔✔Time: 3
ROI:4x
Cap Range: $4 Mil- $15 mil
✔✔Angel capital market - ✔✔-Often fund pre-seed/seed stage capital needs
-In the past they have been fragmented but is moving toward consolidation
-Predominantly local
-Developing and appluing early stage investment best practices
-Growing aggregate funding capacity per round
✔✔Angel group attributes - ✔✔-Experienced
median 9 years investing
median 10 investments
-Invest close to home and in area of expertise
-Focused on best practices
deal screening
due dilligence
valuation
-Value add investors
Participate in governance
-300k active angels
-20k in groups
✔✔What percentage of equity is provided for startups by angles? - ✔✔90%
✔✔Venture Capital Funds - ✔✔-Seasoned investors
6.7 principals per fund
-Wall Street not main street
Normally syndicate across minimum two VC funds
-Focused on best practices
Typically 25% to 40% equity ownership at initial investment
-Post Investment
Absolute board participation
Stong followon funding and very helpful with exits
✔✔Pre-Money Valuation - ✔✔-Projected enterprise value of business as it currently
exists
=Equity + Debt capital
, ✔✔Post Money Valuation - ✔✔-Business value after investment
=Pre-money + Capital
✔✔Investor % Equity Required Ownership - ✔✔=Total investor ROI/Total Exit Value
✔✔Exit Value - ✔✔= Exit EBITA x EBITA Multiple
✔✔Key Qualitative Valuation Factors - ✔✔-Strength of Management Team
industry or start-up experience
team completeness
-Size of business opportunity
Market Size
Aggregate revenue projections
barriers to entry
-Capital Efficiency
Number of investment rounds
Ratio total capital r=to revenue projection
✔✔John Ason Startup Valuation Model - ✔✔-NO early stage business is worth more
than $5 millipn
Idea
Prototype
Management
Revenues
Relationships
-Each score from 0-5: 0- $0, 1-$125k, 2-$250k, 3-$500k, 4-$750k, 5-$1M
✔✔New Investor Price per Share/Unit - ✔✔Total investor $ capital amount/ {[Previous
total # Shares outstanding/(1-% New Equity)] - Previous total # shares outstanding}
✔✔Term Sheet Funcation - ✔✔-Written consensus of agreed upon major investment
parameters
-Outline for legal preparation of closing documents
-Prospective Co-Investor communication tool
-Account for all equity
✔✔Participating Liquidation Preference - ✔✔Investor will get their money back on
investment plus dividends and preffered equity (the liquidation multiple)
✔✔Preferred Stock Term Sheet - ✔✔-Investment Pricing
-Corporate governance document parameters
-Investment business fundimentals and responsibilities
-Overall board of governance and voting
-Fully diluted capitilization table
ANSWERS MARKED A+
✔✔Targeted equity investor ROIs (Early stage) - ✔✔Times: 4
ROI: 10x
Cap Range:$1.5 Mil- $3 mil
✔✔Targeted Equity Investor ROIs (Venture) - ✔✔Time: 3
ROI:4x
Cap Range: $4 Mil- $15 mil
✔✔Angel capital market - ✔✔-Often fund pre-seed/seed stage capital needs
-In the past they have been fragmented but is moving toward consolidation
-Predominantly local
-Developing and appluing early stage investment best practices
-Growing aggregate funding capacity per round
✔✔Angel group attributes - ✔✔-Experienced
median 9 years investing
median 10 investments
-Invest close to home and in area of expertise
-Focused on best practices
deal screening
due dilligence
valuation
-Value add investors
Participate in governance
-300k active angels
-20k in groups
✔✔What percentage of equity is provided for startups by angles? - ✔✔90%
✔✔Venture Capital Funds - ✔✔-Seasoned investors
6.7 principals per fund
-Wall Street not main street
Normally syndicate across minimum two VC funds
-Focused on best practices
Typically 25% to 40% equity ownership at initial investment
-Post Investment
Absolute board participation
Stong followon funding and very helpful with exits
✔✔Pre-Money Valuation - ✔✔-Projected enterprise value of business as it currently
exists
=Equity + Debt capital
, ✔✔Post Money Valuation - ✔✔-Business value after investment
=Pre-money + Capital
✔✔Investor % Equity Required Ownership - ✔✔=Total investor ROI/Total Exit Value
✔✔Exit Value - ✔✔= Exit EBITA x EBITA Multiple
✔✔Key Qualitative Valuation Factors - ✔✔-Strength of Management Team
industry or start-up experience
team completeness
-Size of business opportunity
Market Size
Aggregate revenue projections
barriers to entry
-Capital Efficiency
Number of investment rounds
Ratio total capital r=to revenue projection
✔✔John Ason Startup Valuation Model - ✔✔-NO early stage business is worth more
than $5 millipn
Idea
Prototype
Management
Revenues
Relationships
-Each score from 0-5: 0- $0, 1-$125k, 2-$250k, 3-$500k, 4-$750k, 5-$1M
✔✔New Investor Price per Share/Unit - ✔✔Total investor $ capital amount/ {[Previous
total # Shares outstanding/(1-% New Equity)] - Previous total # shares outstanding}
✔✔Term Sheet Funcation - ✔✔-Written consensus of agreed upon major investment
parameters
-Outline for legal preparation of closing documents
-Prospective Co-Investor communication tool
-Account for all equity
✔✔Participating Liquidation Preference - ✔✔Investor will get their money back on
investment plus dividends and preffered equity (the liquidation multiple)
✔✔Preferred Stock Term Sheet - ✔✔-Investment Pricing
-Corporate governance document parameters
-Investment business fundimentals and responsibilities
-Overall board of governance and voting
-Fully diluted capitilization table
