What Your Cap Table Must Have

Capitalization tables – “cap tables” for short – are tools used by startups to track ownership in their company. At Redwood, we work with thousands of cap tables for our valuation engagements every year. We receive – and decode – all types and variations, from highly detailed Excel workbooks to back-of-the-napkin scribble from busy founders. … Continued

What Is Equity in Business?

  What is equity in business? It is a question whose answer every small business owner would do well to understand. 77% of small businesses rely on personal savings to get off the ground, and more often than not, those personal savings are life’s savings. When everything you own is on the line, equity must … Continued

Is Carta’s Pre-Money Valuation Reasonable?

In December 2018, Carta announced a Series D preferred financing round raising $80M and valuing the Company at a Pre-Money of $800M. As valuation specialists, we wanted to take a deeper dive into the metrics surrounding this latest financing. Based on public information, we estimated Carta’s revenue for 2018 to be roughly $25M, which implies … Continued

Will eShares be able to continue to support Silicon Valley Bank Analytics valuation clients after acquisition? [Updated September 21st 2017]

eShares has officially “purchased” SVB Analytics and wrote a surprising blogpost with several strange and potentially alarming comments about the acquisition. Here are our key reflections on eShares’ blog post: Arbitrary Deadlines – In the press release, eShares gives an arbitrary and very short deadline for previous SVB valuation clients to sign up with them … Continued

Downside of Venture-Backed Common Investments

Raising common stock for first rounds of venture investments can have large, unintended consequences on employee compensation and common stock valuations, especially for 409a valuations.  The Boston Business Journal released an article discussing how Jamie Goldstein’s new fund, Pillar, hopes to better align the interests of management and investors by purchasing common stock instead of … Continued

Purchase Price Allocation

At Redwood Valuation we perform independent business valuations and purchase price allocation valuation to help companies comply with the requirements of ASC 805 (previously SFAS No. 141R), which includes determining the fair value of the transaction consideration, intangible assets, liabilities, and certain tangible assets as of the date of acquisition, and to allocate the value of the … Continued

409A Valuation Guide: Importance of 409A Valuations

409A Valuations have been targeted in recent years by big box cap table software providers and have been used as a marketing ploy by these venture-backed behemoths to capture clients. The market has been flooded with ultra-low cost “automated” 409A offerings in an aggressive effort to try and consolidate the valuation market and reduce the … Continued

IP Valuation

Intellectual property evaluation and IP valuation services are an essential undertaking in certain situations. Over the last few decades, the business world has changed markedly. Now, a company’s value is decided not so much by its machines and facilities and other hard assets, but by its processes, ideas, and designs – that is, its intellectual … Continued