Chapter kickoff

Valuation is one of my favorite chapters to teach, because it usually surprises folks how differently growth investors think about valuation. Even though valuation is a universal concept in corporate finance, it’s incredible how differently it can be applied! In these lessons, you’ll learn: Update for 2022/2023 market correction In 2022, there was a large …

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2. Valuation framework – Buy $2 tomorrow for $1 today

FAQ: What scenarios might lead to multiple expansion? We’ll discuss this in lots of detail throughout this Valuation section of the course. If you can’t wait and want a sneak peak, take a read of Bill Gurley’s article on 10x Revenue Club. It provides a solid foundation.

7. Step #1 – Pick metric

FAQ: “Why not use entry multiples that are FURTHER into the future than the next twelve months (NTM)?” The main reason is that it’s really hard to predict what will happen in the distant future. Even experts find it challenging to forecast beyond a year, let alone five years or more. There’s a lot of …

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6. Valuation process

FAQ: How do “traditional growth” and “venture-style growth” investors differ in their valuation approach? This is a great question. To discuss this, let’s divide the world of growth investors into two camps: In general, Traditional Growth investors place a greater emphasis on profitability, margins, and business model. They are likely to target businesses that are …

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