Valuing Preferred Stock

"This paper [from Salman Farmanfarmaian] outlines a methodology for valuing preferred stock and other complex financial instruments used primarily in ventre capital. Although venture capitalists appear to have a solid understanding of the capital structures they create, the analytical framework described here, as well as the graphical interpretations used to show the payout to stakeholders in a liquidation event, can serve in explaining some seemingly complex capital structures to management teams or stockholders who might have less sophisticated financial backgrounds."