This last video completes the three series post on projecting early stage capitalization and the effects a number of financing rounds has on an exit event.

EBITDA – Earnings before interest, taxes, depreciation, and amortization added back. EBITDA can be used to analyze and compare profitability between companies and industries because it eliminates the effects of financing and accounting decisions (i.e. varying levels of debt or mezzanine capital with varying structures or interest rates, capital expenditures, etc.).
EBITDA Multiple – sometimes also referred to as Enterprise Multiple, it is calculated as the …

Here is part two (of three) from my post yesterday detailing capitalization and ownership projection through three rounds of investment. I’ve added some commentary below the video about why projecting early stage capitalization is important.

Why are Early Stage Capitalization Projections Important?
Understanding early stage capitalization structure is important for company founders. It helps show the potential ownership structure sometime in the future based on capital needs during the operation of the business. The video above helps to illustrate the same methodology Brennan and I used to determine Pocket Tales early stage …

Below is a video demonstrating how to project the capitalization structure of your company. The video is in two parts, so look for another post finishing up the demonstration with more commentary (best viewed in full screen mode).