You can adjust the green cells freely Total Market Size $17,000,000.00 Percentage Captured 40.

00% Operating Margin 60.00% Years to Exit 5 Compareable P/E 13 Desired IRR 40.00% Desired Investment $1,000,000.00 Currently Issued Shares 500,000 Fixed costs are only used for comparison purposes in the graph(s). All valuations only account for variable costs Yearly Fixed Costs $400,000.00 Capitalization rate is used to determine the residual value in the discounted cash flow valuations Capitalization Rate 18%

The Discount Cash Flows require additional input to run which needs to be entered on the worksheets DCF and DCF2 respectively. Classic VC Method First Chicago Method DCF Linear DCF Exponential Average PV of Company Shares to IssueShare Price Weighting $6,574,641.52 89692 $11.15 25% $5,489,825.67 111363 $8.98 25% $4,963,235.09 126160 $7.93 25% $3,917,250.09 171394 $5.83 25% 1 $5,236,238.09 $124,652.15 $8.47

Classic VC Method Evaluation Estimated PV of Company $6,574,641.52 Shares to Issue to VC 89692 Share Price $11.15

The first Chicago method uses a weighted average of multiple scenarios, in this case three. Once again you can change the green cells. Percentage of Original Market Capture Estimate Likelihood of Occurrence Terminal Net Income Terminal Value Present Value Weighted Value First Chicago Estimated PV of Company Required Ownership % Shares to Issue to VC Share Price Good Exit Mediocre Exit 150% 60% 40% 35% Failure 10% 25%

100%

$4,080,000.00 $1,632,000.00 $272,000.00 $53,040,000.00 $21,216,000.00 $3,536,000.00 $9,861,962.28 $3,944,784.91 $657,464.15 $3,944,784.91 $1,380,674.72 $164,366.04 $5,489,825.67 18.22% 111363 $8.98

Uses the inputed values to calculate DCF when you change the green cell to alter % of market captured in year one, assumes roughly linear growth. Initial % of Market Captured Linear Growth Rate 3% 9.25%

DCF NPV $4,963,235.09 Required Ownership % 20.15% Shares to issue to VC 126160 Share price $7.93 Don't edit below this line Excel outputs there Year Net Income PV of Cash Flow NPV Residual 1 $204,000.00 $145,714.29 $145,714.29 $2,809,675.86 2 $833,000.00 $425,000.00 $570,714.29 3 $1,462,000.00 $532,798.83 $1,103,513.12 4 $2,091,000.00 $544,304.46 $1,647,817.58 5 $2,720,000.00 $505,741.66 $2,153,559.23

Uses the inputed values to calculate DCF when you change the green cell to alter % of market captured in year one, assumes roughly linear growth.

The graph is generated automatically when the linear discount cash flows are calculated. Fixed costs are not factored into income.

Yearly Net Income

$3,000,000.00

$2,500,000.00

$2,000,000.00

$1,500,000.00

Fixed Costs Income

$1,000,000.00

$500,000.00

$0.00 1 2 3 4 5

This discount cash flow does not use a linear growth model and allows for multiple years after investment before product reaches the market place. Years until cash flow 2

DCF NPV $3,917,250.09 Required Ownership % 25.53% Shares to issue to VC 171394 Share price $5.83 Don't edit below this line Excel outputs there Year Net Income PV of Cash Flow Residual 1 $0.00 $0.00 $2,809,675.86 2 $0.00 $0.00 3 $680,000.00 $247,813.41 4 $1,360,000.00 $354,019.16 5 $2,720,000.00 $505,741.66

The graph is generated automatically when the non-linear discount cash flows are calculated. Fixed costs are not factored into income.

Yearly Net Income

$3,000,000.00

$2,500,000.00

$2,000,000.00

$1,500,000.00

Fixed Costs Income

$1,000,000.00

$500,000.00

$0.00 1 2 3 4 5

The graph is generated automatically when the non-linear discount cash flows are calculated. Fixed costs are not factored into income.

This worksheet uses the inputed data except Desired IRR Once again change the green cell. Excel alters the orange cell automatically IRR VC Ownership % Final Value of VC Investment Shares to Issue to VC Share Price Calculated Goal 111% 118.19% $41,792,658.23 -3248475 -$0.31 50%

This sheet uses all the inputed data but Desired Investment. Once again change the green cell. Excel alters the orange cell automatically VC Investment VC Ownership % Final Value of VC Investment Shares to Issue to VC Share Price Calculated Goal $2,887,733.33 $600,000 44% $15,530,922.92 391620 $7.37

This sheet uses all the inputed values but Desired Investment Change the green cell, Excel changes the orange Calculated Goal Founder Ownership % 84.42% VC Money Available $1,024,536.67 VC Ownership % Shares to Issue to VC Share Price 15.58% 92299 $11.10 25%

Interim Calculations Orange Cells used by Macros Terminal Net Income $2,720,000.00 Terminal Value $35,360,000.00 Required Ownership % 0.152099548 Last Row Of Data Last Row Of DCF Last Row Of DCF2 14 14 14 DCF Fixed Costs $400,000.00 $400,000.00 $400,000.00 $400,000.00 $400,000.00