Valuing Project Achieve

HBS Case No.: 201-080; Teaching Note: 201-130

Posted: 29 Jan 2002

See all articles by Mihir A. Desai

Mihir A. Desai

Harvard Business School - Finance Unit; National Bureau of Economic Research (NBER)

Date Written: June 1999


SUBJECT AREAS: Valuation, Entrepreneurial Finance, Corporate Finance

CASE SETTING: June 1999, U.S. Software

Project Achieve is a startup providing information management solutions for schools. Its founders see a need for software both to manage the volumes of information necessary to administer a school and to connect parents, teachers, and students in a more effective way. Originally funded by angel investors, Project Achieve is raising its first formal round of financing and needs to establish a firm valuation. The case outlines the economics of the business and provides the necessary background figures to build the business model and arrive at a valuation.

This case explores quantitative considerations of venture financing: (1) value neutrality of equity issuance is illustrated; (2) cost of capital is computed from raw return series, and the appropriate discount rate is selected based on comparables; (3) decision trees are used to highlight the importance of probabilistic thinking; and (4) subscriber models are compared with annual free cash flow models both for determining financial value and as decision-making tools for business choices.

In addition, the case can provide a setting to discuss the more qualitative issues involved in choosing investors. In particular, the founders are comparing two options: an infusion of additional capital from current and new investors or an investment from a potential strategic partner. Each option has very different implications for the direction of the business going forward.

Suggested Citation

Desai, Mihir A., Valuing Project Achieve (June 1999). HBS Case No.: 201-080; Teaching Note: 201-130, Available at SSRN:

Mihir A. Desai (Contact Author)

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
617-495-6693 (Phone)
617-496-6592 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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