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Advanced Financial Analysis Series - VC Investing: Private Company Valuation & Participating Preferred Securities Waterfall Modelling [Complete] Event Code: 180309W
Date 09-Mar-2018
Time 08:45 a.m. - 5:00 p.m.
Venue HKSFA Office, 14/F, BOC Group Life Assurance Tower, 136 Des Voeux Road Central, Hong Kong
Speaker(s) Mr. Hamilton Lin, CFA
Wall St. Training
Fee HKSFA Member(s) at HK$2,500.0/person
CFA Candidate(s) at HK$4,000.0/person
Guest(s) and Non-member(s) at HK$4,000.0/person
This seminar is qualified for 6.5 CPT hour(s), 6.5 CE hour(s), 6.5 RBV CPD hour(s)
  • Special Discount: 10% off for those who register for two (or more) workshops.
  • Only Visa and Master Card are accepted for online payment.
  • The fee includes course materials.
  • Classrooms are not equipped with computers, participants WILL HAVE to bring their own laptops.  Please bring Excel for PC installed (any version).  Macs will not be as effective as shortcut keys are different.
  • Please make sure your laptop has a working USB port to copy files at the beginning of class.
  • For attendance-taking purpose, participants’ names and company name (if any) will be given to the speaker at this workshop.

Event Details
HKSFA is proud to present our “Advanced Financial Analysis Series" held in conjunction with Wall Street Training & Advisory. This Series of workshops builds upon and expands our prior successful and popular Financial Analysis Series and will provide practical, Excel-based career-enhancing programmes related to financial modelling, projection modelling, fundamental analysis, mergers & acquisitions and leveraged buyouts. This series of hands-on workshops will consist of the following full-day, extended programmes:
  • Advanced Financial Modelling – Core Model
  • Advanced Excel for Data Analysis
  • VC Investing: Private Company Valuation & Participating Preferred Securities Waterfall Modelling
The goal of these programmes is to improve and elevate the skills sets of the financial analyst and the investment professional. Heavy emphasis is placed on being as effective and efficient as possible with Excel.
About Wall Street Training & Advisory:
Wall Street Training & Advisory, Inc. (WST) is a leading global provider of training and advisory services. WST has a nearly two-decades-long track record of successfully providing services to clients across a variety of financial industry verticals, including investment banking, mergers & acquisitions, equity and fixed-income research, asset and investment management, credit analysis, private equity, and high-yield LBO and special situation/distressed analysis. WST has also worked with Fortune 500 companies, government agencies, extra-governmental regulatory organizations, and professional organizations around the world to provide tailored training for new hires and existing employees. To learn more: 
Highlights of the Workshops:

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 and 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.
Prerequisite: Intermediate proficiency using Excel, a solid grasp of basic accounting fundamentals and an understanding of basic valuation techniques are required.  This Corporate Valuation class is a hands-on, technical workshop. 
*Rating – Intermediate
(Material presented will have technical elements requiring a working knowledge of the subject to make full use of the presentation.)  

Click here to download the event flyer for further details.