Startup Valuation Tips

YoungUpstarts

In order to attract investors, you have to know the valuation of your company or how much your company is worth. Many new business owners struggle with valuation because it isn’t as easy as crunching some numbers. Take a look at this infographic to learn more about valuation.

Benefits Of Business Valuation

YoungUpstarts

There are many reasons why you need a current valuation of your business and many business owners assume that it is only necessary when selling but actually, this is not the case. Business valuations and wealth management. Others business valuation company valuation selling a business

Valuations 101: Scorecard Valuation Methodology

Gust

In 2011, the valuation of pre-revenue, start-up companies is typically in the range of $1.5–$2.5 Scorecard Valuation Methodology. This method compares the target company to typical angel-funded startup ventures and adjusts the average valuation of recently funded companies in the region to establish a pre-money valuation of the target. Pre-money valuation varies with the economy and with the competitive environment for startup ventures within a region.

How to Talk About Valuation When a VC Asks

Both Sides of the Table

I thought I’d write a post about how to talk about valuation at a startup and give you some sense of what might be on the mind of the person considering funding you. It’s not uncommon for a VC to ask you how much capital you’ve raised and what the post-money valuation was on your last round.

Valuation Part I: Peeling the Onion, or How Top Investors Value the Startups They Invest In

Gust

Early-stage technology company valuations are generally a crap-shoot. This post builds on top of his work, and attempts to shed additional light on the valuation process. How To Fundraise Starting Your Company valuation valuations

Valuation Methods 101

Gust

This is the first of a six part series on different methods used by angel investors to arrive at pre-money startup valuations. Detailed descriptions will be published over the next few weeks: The Scorecard Method: This method compares the target company to typical angel-funded startup ventures and adjusts the average valuation of recently funded companies in the region to establish a pre-money valuation of the target. The Cayenne Valuation Calculator.

What Startups Need To Know About Business Valuation

YoungUpstarts

With the daily demands of running a business along with the financial pressures and challenges inherent in early-stage companies, a business valuation may not be the first thing an entrepreneur thinks of when he awakes each morning. When does a startup company need a business valuation?

Comparing valuations between rounds

The Equity Kicker

A few of them have done good up rounds and the easiest way to describe the magnitude is to talk about the valuation multiple. As a refresher, the post-money valuation is calculated as the pre-money valuation plus the amount of money invested.).

10 Rules of Thumb for Startup Investment Valuation

Startup Professionals Musings

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? valuation entrepreneur startup investor business

Valuation trickle down

The Equity Kicker

He used this chart as evidence: Second, I read Josh Kopelman’s/First Round Capital’s Open Letter to Investors from May this year which says that seed valuations are up 3x from 2007-2015 without a corresponding increase in exits. I’m back to the bubble question this morning.

How we determine valuations for marketplaces

Version One Ventures

I often get asked about how to determine the valuation for a marketplace startup that is starting to scale. Our assumptions for this valuation: Scale: > $1b GMV. The post How we determine valuations for marketplaces appeared first on Version One.

When Should Startup Founders Discuss Valuation with Seed VCs?

View from Seed

Or, in the case of a convertible note, they’ll explicitly state a valuation cap. On the positive side for a founder, directly stating a high valuation expectation up front can anchor the negotiations to a higher level, assuming that an investor takes the leap of faith to invest.

Ten Components of Startup Valuation For Investors

Startup Professionals Musings

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)?

10 Rules of Thumb for Startup Investment Valuation

Gust

Once you have a potential investor excited about your team, your product, and your company, the investor will inevitably ask “What is your company’s valuation?” How much is NewCo worth to investors at this point (pre-money valuation)? Image via eHow.com.

Valuations 101: The Venture Capital Method

Gust

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors. It is one of the useful methods for establishing the pre-money valuation of pre-revenue startup ventures. The concept is simply…since: Return on Investment (ROI) = Terminal (or Harvest) Value ÷ Post-money Valuation. (in Then: Post-money Valuation = Terminal Value ÷ Anticipated ROI.

Valuations 101: The Cayenne Calculator

Gust

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors. The High Tech Startup Valuation Estimator is an online tool developed by Cayenne Consulting to assist entrepreneurs and investors in estimating the pre-money valuation of startup enterprises. It is very easy for optimistic users to quickly arrive at unreasonable pre-money valuations for startup ventures.

The Challenge Of Figuring Out Your Pre-Money Valuation

YoungUpstarts

Sometimes the list of challenges may feel never ending – from writing the business plan to finding the right partner – but one of the single most important challenges entrepreneurs face is calculating a realistic, defensible pre-money valuation. . What valuation methods did you use?

5 Ways To Radically Improve Your Company Valuation

YFS Magazine

For business owners, startup valuation is a topic that causes lots of angst, raises tons of questions and definitely gets emotions blazing. Finance Grow business valuation company valuation fundraising investors invse money raising capital raising startup capital raising venture capital

Tesla Lost $700 Million Last Year, So Why Is Tesla’s Valuation $60 Billion?

Steve Blank

What explains this more than 1,000 to 1 discrepancy in valuation? However, the question shouldn’t be why Tesla has such a high valuation. Automobile manufacturers shipped 88 million cars in 2016. Tesla shipped 76,000. Yet Wall Street values Tesla higher than any other U.S.

Valuations 101: The Risk Factor Summation Method

Gust

The Risk Factor Summation Method the fifth methodology for estimating the pre-money valuation of pre-revenue companies we have described in recent posts. Readers may have noted that both the Scorecard Method and the Dave Berkus Method considered a narrow set of important criteria for investment in arriving at a pre-money valuation. For more information on determining the average valuations in your area, see the Scorecard Method. million pre-money valuation.

I Built My Startup To A $15M Valuation – While Living In A Van

YFS Magazine

Over a course of two years, I bootstrapped a startup to a $15M valuation – while living in a van. After that experience my sense of reality was redefined. Editor Picks Lifestyle digital nomad lifestyle location independent personal development starting a business startup advice

US startup valuations reach ten year highs

The Equity Kicker

Venturebeat reported yesterday that US startup valuations have reached ten year highs. You can see from the charts above that median valuations have been increasing at all stages from seed through to Series D or later.

How Startup Valuation Works

Business Plan Blog

Startup Valuation is Tricky Business. A valuation is simply an estimated value of a company and is often based on assumptions surrounding the company’s current and future potential. How Startup Valuation Works.

What Valuation Should I Expect in My Seed Round?

This is going to be BIG.

Powered by OpenReel I have to be honest, I'm a little suspect when one of the first questions a founder asks me is about valuation. That being said, you want to feel like you got a good deal--and your lead investor should be able to walk you through how they got to a particular valuation and why they thought it was appropriate.

Valuations 101: The Dave Berkus Method

Gust

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors. Dave’s valuation model first appeared in a book published by Harvard’s Howard Stevenson in the middle nineties. Add to Pre-money Valuation. Note that the numbers are the maximum for each class (not absolutes) so a valuation can be $800K (or less) as easily as $2.5

2012 Valuation Survey of Angel Groups

Gust

This summer I conducted our third annual survey of the pre-money valuation of pre-revenue companies recently funded by angel groups in North America. Access to our 2010 and 2011 surveys can be found at 2011 Valuation Survey of North American Angel Investor Groups. We asked each group for their median (middle) pre-money valuation of pre-revenue deals. 2012 Valuation Survey. pre-money valuation in US$ millions).

Om Malik on why valuations defy metrics

The Equity Kicker

When companies attract high valuations their investors are predicting the future too – either that the business will trade in M&A at a ‘strategic multiple’ or that they will generate big cash flows. For larger valuations it is the latter.

Gust Launches Comprehensive Equity Management Platform for Cap Table Management and 409A Valuations

Gust

The post Gust Launches Comprehensive Equity Management Platform for Cap Table Management and 409A Valuations appeared first on The Gust Blog. Gust News Starting Your Company 409A valuations cap table management equity managementGust announces acquisitions of Sharewave and Preferred Return; creates the most robust and affordable equity management solution for early-stage startups.

After 20 years: Updating the Berkus Method of valuation

Berkonomics

So how do you use financial projections as valuation metrics when you know the odds of those being accurate predictors of the future are so very unreliable? For example, $500,000 maximum value to each element yields either a maximum pre-money enterprise valuation of $$2 million or $2.5

6 reasons why Latin American valuations are lagging behind Silicon Valley

The Next Web

Latin American startups haven’t had the same valuations as Silicon Valley startups. This frustrates many Latin American entrepreneurs seeking investment, as they don’t understand why Latin American VCs aren’t doing deals at Silicon Valley valuations.

Startup Valuations – Again….

ithacaVC

I have written about startup valuations previously. This morning I was reading one of my favorite daily compilations of articles (called Innovation Daily, subscribe here ) and came across another great short article on startup valuations called “ Seed Rounds: How to Pick a Valuation “ Joseph Walla, who I don’t know, wrote it. There’s a reason it’s so difficult to figure out – valuations have little basis in reality for early stage companies.

Tips To Value Your Startup

YoungUpstarts

Startup valuation, under no circumstances, can be described as a simple affair. The pre-money valuation of other startups is based on the following factors. Your Market Valuation May Differ from Your Worth. Others business advice business valuation startup valuation valuation

Age of companies when they achieve $1bn valuations

The Equity Kicker

It seems to me there are two obvious explanations for the dramatic reduction in the time it takes for companies to achive $1bn valuations: The pace of change is increasing allowing new companies to develop and mature faster.

Tiered Valuation Caps

Austin Startup

TL;DR: Using a “tiered” valuation cap structure in a convertible note or SAFE can provide flexibility that bridges the gap between (i) what founders expect their company to be worth in the near future, and (ii) what investors are comfortable accepting now. Did you get a “good” valuation? What a valuation cap isn’t. For that reason, pegging an appropriate valuation can be very difficult for investors. Traditional valuation caps: downside protection for investors.

Spectacles and $SNAP’s $20B Valuation

Austin Startup

In summary: Snap’s current business doesn’t justify a $20B valuation. How can one justify a $20B valuation for Snap? The product that could most likely justify Snap’s $20B valuation is Spectacles. snapchat news augmented-reality valuation

8 things to consider when determining your startup valuation

The Next Web

Setting a valuation for an early-stage startup looking to raise money is tough. To help, I asked eight founders from YEC the following: What is one thing I should be thinking about as I come up with a valuation… This story continues at The Next Web.

Facebook gets to $250bn valuation in record time – respect

The Equity Kicker

Bloomberg and other sites are lauding Zuckerberg and co for beating current record holder Google’s eight years from IPO to $250bn valuation. Those with long memories will know that Facebook went public with a much larger valuation than Google ($104bn vs $23bn) so the more apt comparison is Facebook’s eleven years from founding to $250bn with Google’s fourteen years. Facebook’s share price was up 2.4%

Startup Valuations: 7 Things to Look for in a Valuation Company

Early Growth Financial Services

Valuation. What you may not know is that it really does matter who performs your valuation. There are a lot of valuation companies out there, so I know many entrepreneurs are tempted to just shop around until they find the lowest price, but this is a mistake. A valuation is more than just a commodity. All valuations are not created equally; there are better valuations, better processes, and better valuations business partners for your company.

Failsafe Ways to Increase Your Startup Valuation

Early Growth Financial Services

Ahh startup valuations. Why are valuations even important? Besides determining things such as the amount of equity you give up for funding and how much value you are able to extract from your company in the long-term, valuations are important for demonstrating how attractive your business is to investors and in showing how you compare with your industry peers. Below are some of the key takeaways: There are 3 main types of valuation: 1.

How Investors Think About Valuation of Pre-Revenue Startups

SoCal CTO

Because of this, I've always tried to stay up-to-speed on how early-stage investors look at valuation of companies. Bill Payne is an expert on how early-stage investors should look at valuation. He just post: Establishing the Pre-money Valuation of Pre-revenue Startups. Especially interesting is the Valuation Worksheet towards the end. A lot of my time is spent helping early-stage companies get to proof points so that they can raise capital.

A Cap is not a Valuation

Bryce Dot VC

Many of the companies with notes we evaluated had valuation caps on them; meaning, if the new investor priced the round higher than the cap the seed investors would reap the benefits of a lower valuation given the earlier risk they’d taken. The problem we began to run into was that founders believed that these caps were actual valuations. Caps are not valuations, they are aspirational and are designed to be grown into.

Startup Valuations Revisited

ithacaVC

On October 17th I posted on seed and early stage startup valuations. This morning I read a post by Marty Zwilling on startup valuations. His post on startup valuations lists the following rules of thumb (i.e., Critically, I am only talking about seed and early stage company valuations as opposed to valuations for more mature companies: Place a fair market value on all physical assets (asset approach) – pretty much a waste of your time.

Don’t get hung up on valuation.

Berkonomics

I can’t tell you how many times I’ve walked away from deals where the entrepreneur insists on a start-up premoney valuation that is so high, no angel could expect to make a return upon the investment, even with a reasonable sales price for the company down the road.