Venture Capital Method - Business Valuation

The video explains the venture capital method used to determine the percentage of a company venture capitalists will purchase. It covers the high-risk nature of startup investments, the need for significant returns to offset failures, and the calculation of ownership percentage based on terminal value. The video also discusses the issue of dilution and the use of preferred shares to protect investors' interests. Overall, it provides a comprehensive overview of how venture capitalists evaluate and invest in startups.

Explain the concept of terminal value in the context of venture capital investments.

What is the significance of preferred shares for venture capitalists?