Venture Capital Investment Framework and Valuation Methodologies: A Comprehensive Analysis of Decision-Making Processes and Financial Modeling Approaches

Abstract

Valuing early-stage, high-growth companies presents significant challenges where traditional financial methodologies may inadequately capture the risks and opportunities inherent in emerging businesses with limited operating histories and uncertain cash flow patterns. This paper examines comprehensive valuation frameworks through the application of quantitative methods to a detailed case study of Rubrik Inc., a data protection and cyber resilience company transitioning to a subscription-driven revenue model and approaching profitability. The study employs Discounted Cash Flow (DCF) analysis, which utilizes the Weighted Average Cost of Capital (WACC) and Capital Asset Pricing Model (CAPM), alongside Comparable Company Analysis (CCA) to address valuation challenges across different stages of company development. Rubrik's financial progression and competitive positioning relative to comparables such as Veeam and Commvault provide practical context for these valuation approaches. Findings highlight the complementary strengths of the intrinsic DCF model, which offers forward-looking insight for companies nearing cash flow breakeven with strong recurring revenue, and market-based CCA, which delivers relative benchmarks to validate assumptions. While qualitative elements like management quality and market opportunity contribute to a comprehensive investment perspective, the analysis emphasizes that integrating robust financial modeling with strategic evaluation enhances decision-making across various investment contexts including venture capital, strategic acquisitions, and public market analysis. The research offers valuable guidance for investors, corporate finance practitioners, and scholars focused on valuation methodologies for high-growth technology companies in complex markets.