Welcome to the quick course get rich numbers, I'm glad you're here means you're serious about what it takes to start a real new business and that you want to know more about how to begin creating a great new business. It also means you're in a hurry. So in this course, I'm going to help you quickly figure out how to set a value for your enterprise and measure the wealth you can create. Let's get going. This is snippet two of the combination that is all about getting rich numbers. In this one, we're going to focus on valuing the company and the wealth that's going to be created.

The methods described here work for companies of any size, whether a sole proprietor or small business, a venture backed company, Angel backed company, or one that's going to be as ambitious as becoming a billion dollar unicorn methods apply to all of them. We'll focus in our examples on a class Classical venture capital Angel backed startup, the method is going to work for all the numbers that you're going to put into any of these businesses. We have four sections we'll go through starting with the introduction, we'll discuss them the capital required and the and some of the investors questions that are going to pop up, and then take you through the seven steps to get the money using some real examples. And finally go through a very detailed one to show you how the value is created and the wealth that is generated. The introduction is all about the two goals that you're going to aim for.

You've got to get the money in order to get started. And you've got to bring that to a point of liquidity where you either sell your company or shares to the public. So the investors in you generate cash. any size business will have these two bases goals. Where should you start? Start with a good idea?

By asking fundamental investors questions. Your Business Plan is not about how you're going to operate the business. That will be an operating plan that will change rapidly by the week sometimes by the day. Instead, this is a plan to get the money and get going, the funding you needed and to launch the business and keep it going. That's what it's all about. You need to know what investors questions to ask and be ready to answer.

The quick course get the money dives into the details of the questions that various investors will be looking for. I highly recommend you take that course before you proceed to complete raising funding plans. Today we'll focus on the valuation part of that kind of plan step by step answering why and how and using methods that are proven to be successful. We'll introduce new terms exit strategy and liquidity event together. Why value the company because it's part of the plan to get the money without the money you really can't get going. The good business plan is the one that gets the money.

If it doesn't get the money, it's not a good business plan. The purpose is to convert an idea yours into a financeable business, it can get the money that's going to move you through a process involving multiple stages over months, eight, nine months or more to a final decision. Yes, we'll invest. The core document that is the end point is the business plan. That plan includes numbers as well as the ability to give answers to questions asked about those numbers. As a result, you have to generate the right numbers and I'll show you which ones you'll need later.

These are key questions you need to be able to respond to what percent of our company will the investors require? How many shares should be in the stock option pool for other employees? How valuable will be be at a point of liquidity such as initial public offering or sale? And how valuable today are we? Those are answers needed for investors, and that's whom we're focusing on here. If I put $1 into your business, what will it be worth in the future?

Pretty important question to be able to answer isn't it? What is meant by a financeable business for that investor, that means their investment goes in gets cashed out and they're expecting something like 10 times their dollar put in five years. That's a rule of thumb that private company investors also called venture investors use all the time. Does your company have the potential that I need? That's the second question. Well, let's examine what's meant by that a little bit.

If I invest 4 million today at $1 per share, I'll get 4 million shares. If my 4 million shares are 20% of the company at the point of liquidity, and if the company is valued at $200 million at that liquid point, then I'll have $40 million of value. My 4 million invested in day one will be worth 10 times what it was at the beginning, that 10 times is satisfying to me. Investors conclusion is, hey, the numbers work 200 million that liquidity. I own 20% $40 million. I put in for 10 X. I like this sounds great.

Here's your money. That's where you want to go. That completes the introduction section. Let's go on to section number two and talk about the capital you're going to be required and the questions you're going to be responsible for answering that investors are going to ask you