Venture Capital and Private Equity Valuation Support
The movement toward fair value accounting is requiring venture capital and other private equity investors to obtain independent valuations of their portfolio holdings in response to ASC 820 (formerly FAS 157). And some limited partners are requesting independent appraisals to reconcile the value reported for a company held in different venture portfolios.
Audit firms have been pushing venture capital funds to provide greater support for the values assigned to individual companies. For audits of 2008 results, auditors required the finance staff of venture capital funds to perform more analysis than ever before and it looks as though the requirements for 2009 remained stringent.
Teknos offers a range of services to venture capital and other private equity firms to assist with these valuation and reporting requirements:
- Consultation with the venture capital firm and its auditor to select the portfolio companies with the greatest potential to affect portfolio value;
- Valuation of individual companies (for the venture capital firm or for both the venture capital firm and the board of directors of the portfolio companies, i.e. to support stock option issuance in compliance with IRC 409A and ASC 718 (formerly FAS 123R);
- Offering analytical support to the venture capital firm finance staff by providing
- comparable company/transaction selection based on our extensive knowledge of the information technology, life sciences, and alternative energy and cleantech markets and access to expensive databases,
- sophisticated allocation tools (including Black-Scholes option and binomial lattice models),
- financial data and valuation metrics to utilize in calculating valuation ranges (which leaves that the final value decision for each portfolio company in the hands of the venture capital firm).
- Support for Statement on Accounting Standards 73 (SAS 73) and similar reviews of valuation work by Big Four and other audit firms.
To initiate a discussion about how we could support you in venture capital or private equity reporting, please contact us: .(JavaScript must be enabled to view this email address)