Proceedings of the 2nd International Academic Conference on Blockchain, Information Technology and Smart Finance (ICBIS 2023)

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A Research on Valuation Models in Private Equity Investment

Authors
Fanshen Xu1, *
1University of Pittsburgh, Pittsburgh, PA, USA
*Corresponding author. Email: xufanshen2022@126.com
Corresponding Author
Fanshen Xu
Available Online 10 August 2023.
DOI
10.2991/978-94-6463-198-2_162How to use a DOI?
Keywords
Private Equity Funds; Valuation model; Discounted Cash Flow; Startup; M2
Abstract

This paper aims to study the valuation models and build a valuation model taking the macroeconomic variables into consideration to assess the value of the startups. This research method uses the Fisher equality and DCF three-stage model, then build a cluster model taking account of the inflation rate, based on the analysis of the trend represented with the inflation rate data in the past twenty year. At last the paper used the real data and build valuation models and pose a contrast between traditional DCF three-stage model and Fisher DCF three-stage model. The results show that the macroeconomic variables have an import effect on the value evaluation of startups, and the private equity will not suffer too much risk and cost of the capital, the startup will have an objective evaluation based on the free cash flow and macroeconomic environment. The research also provides an idea for startup valuation from another perspective. More consideration of macroeconomic variables that are relatively easy to evaluate and predict, and can not only improve the accuracy and stability of valuation, but also increase the probability of success for both parties to the transaction.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2nd International Academic Conference on Blockchain, Information Technology and Smart Finance (ICBIS 2023)
Series
Atlantis Highlights in Computer Sciences
Publication Date
10 August 2023
ISBN
978-94-6463-198-2
ISSN
2589-4900
DOI
10.2991/978-94-6463-198-2_162How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Fanshen Xu
PY  - 2023
DA  - 2023/08/10
TI  - A Research on Valuation Models in Private Equity Investment
BT  - Proceedings of the 2nd International Academic Conference on Blockchain, Information Technology and Smart Finance (ICBIS 2023)
PB  - Atlantis Press
SP  - 1558
EP  - 1565
SN  - 2589-4900
UR  - https://doi.org/10.2991/978-94-6463-198-2_162
DO  - 10.2991/978-94-6463-198-2_162
ID  - Xu2023
ER  -