While you are free to prepare the financial projections according to whatever practice you deem appropriate, there are a few considerations specific to the methodologies employed by Valer.
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Valer applies industry level probability of survival rates to company cash flows to account for the risk of failure attending start-up enterprises. This is a common practice, albeit one sometimes implemented less transparently through applying an elevated discount rate. Since probabilistic adjustments are already being made through the probability of survival mechanism, it may make sense to use base case projections that assume successful execution of the company’s business plan. Adjustments may, however, be made for company specific risks or weighting of specific upside or downside scenarios.
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We recommend including as many years as projected financials as possible to model “steady state” normalized levels of EBITDA and reinvestment needs in the later years of the projection used to arrive at a terminal value for the DCF and exit values for the VC method analysis.

We recommend presenting EBITDA on a normalized basis, reflecting adjustments for non-recurring items and non-cash items (other than share based compensation). Offsetting adjustments for cash non-recurring items to accurately model free cash flow can be reflected in the appropriate cash flow statement line items. A proportional share of non-consolidated EBITDA from joint ventures and other affiliates can be modeled into the EBITDA line item or valued separately and included in equity method investments in the capital structure section of the Set Parameters input page. Such amounts should not be double counted by including both via equity method investments in the capital structure inputs and an additional income stream via proportional consolidation.