Essay About Post Fdaestimation Of Total Venture Value And Capital Investment Perspective

Dermacare
DermaCare Case Questions 1. Evaluate DermaCare from a Venture Capital investment perspective. Is it potentially a good investment? It is potentially a good investment. Using DRTV to market direct to the consumer which can differentiate DermaCare from other products like Zeno Zit Zapper. DermaCare has a huge market, with 45 million people in the US alone suffering from acne in a $2 billion a year OTC market. So the  future of DermaCare is promising. With an investment of total $4.15 million, it could lead to a $7.65 million postfinancing venture value, and founders would hand over IP to Dermacare.  So, Foundation Capital could have control over DermaCare and its IP. And Foundation Capital would choose M&A, or IPO to exit to gain a significant margin over that.YESNOMarketcompetitorUniqueExit routeFDA approval3. As DermaCare, which financing offer would you accept? Why? Band of AngelsFoundation CapitalTotal investment$1,500,000$1,000,000 pre FDA$3,150,000 post FDAEstimation of total venture value$4,500,000 post financing valuation$7,650,000 post financing valuationDilution of shares66.7% existing owners33.3% new owners45.8% existing owners54.2% new ownersControlExisting owners have 66.7 voting rightsTwo existing shareholders(one is CEO)One outsider and two investorsIntellectual propertyFounders keep IPFounders hand over to DermacareExit strategyFlexibleComplex(IPO,M&A)Higher valuation