Any flotation would delay a full exit for some time and run the risk of fetching a lower valuation.
Even if entrepreneurs can get above-market valuations, they run the risk of getting a lower valuation on a subsequent round, a phenomenon known as the "deadly down round".
Recapitalizations, where existing stockholders are crammed down to near zero equity in anticipation of a new round of financing at a lower valuation, are common.
This is important, because we know Facebook recently received a term sheet for a similar venture round of funding at a lower valuation ($8 billion) which was turned down because it was based on the requirement of a board seat.
Together with a purchase of a company at a lower valuation multiple than its own — roughly eight times forecast Ebitda for Beckman this year, against 11 times for Danaher — that means the buyer will see increased earnings without giving away the farm on price.
This will surely lead to more startups raising a down-round (a round of funding raised at a lower valuation than in a previous round) or not being able to raise at all — many of whom will sadly die.
provided that if the Secretary orders a new appraisal under subclause (I), notice of the new appraisal shall be given as specified in clause (ii). in accordance with subparagraph (F)(ii), where the new appraisal results in a lower valuation of the land.
They are more leveraged to rising revenues and sell at a lower valuation of prospective enterprise value.
That led to a series of smaller investments from backers such as SoftBank, which is reported to have put $250 million in at a lower valuation of $3.5 billion in April of this year, to keep the house in order.
WALL STREET JOURNAL Dole Is Seen as Worth More in Pieces | The fruit and vegetable company Dole, which is trading at a lower valuation than most of its rivals, could be worth a combined $15 a share if it were broken up, 58 percent more than its closing price on Tuesday, according to Paradigm Capital Management, Bloomberg News reports.
