When we value a company, we value its equity (the Market Value of Equity) to determine the price paid for a transaction (acquisition, financing or other) where the investor receives ownership, which is an equity stake. The valuation can take place also for information purposes for debt financing, but it is mostly relevant for equity Read more about THE BASICS OF STARTUP VALUATION[…]
When deciding what type of company valuation you need, there are few options available. It usually depends on your specific situation, company size, information available (specifically when the valuation is ordered by an investor) and type of transactions, as well as the expected audience and negotiations. The purpose or transactions for which you may want a Read more about BUSINESS VALUATION: WHAT ARE MY OPTIONS?[…]
What was once a myth and rarity is now an everyday story. ‘Unicorns’ are private startups whose valuations have reached $ 1 billion +. Reading out the mythological background of the unicorn out of curiosity, the King of Ethiopia claimed that “it is impossible to take this ferocious beast alive; and that all its strength Read more about WHERE DO UNICORNS COME FROM?[…]
As a valuation professional, explaining what value is and how you get to it, is sometimes a challenge. There are so many transactions in the market, especially at the early stages, that concepts have to be simplified to be able to negotiate quickly and effectively. The valuation then becomes a value that you agree on Read more about YOUR VALUATION IS NOT FIXED IN STONE[…]
Your ideal financing strategy is closely connected to your milestones. This is an example of milestones for a startup, this does not represent how funding rounds take place in all situations. Funding depends on a variety of factors. It‘s also possible to have multiple smaller seed rounds, as it‘s happening now in the market, and Read more about Strategy planning for early-stage startups: How to reduce risks[…]
It is not always straightforward what value or valuation really means. In the startup world, everyone is talking about it, tech news are filled with funding round valuation analysis and exit stories. Yet the talk often only touches the surface of what there is to know about the valuation of early-stage investments, or even the Read more about WHAT IS VALUE?[…]
There are many potentially great entrepreneurs with valid ideas, but often with little knowledge as to how to take the idea further with the limited resources they have available. Luckily there are now a variety of ways to fund businesses. All these options may be confusing at first. However, depending on the type of business Read more about How to start planning your fundraising campaign[…]
Aswath Damodaran’s webinar on “Narrative and Numbers: A Guide to Disciplined Story Telling and Imaginative Number Crunching” on Sageworks provided some very interesting insights into different approaches to valuation. Damodaran distinguishes between those people who are more comfortable with number crunching, and the storytellers. The ‘Numbers’ people tend to think that valuation is all about Read more about DAMODARAN ON NARRATIVE AND NUMBERS IN VALUATION[…]
Before starting with your valuation you should establish a good information base, whether you’re doing it for your company internally or for an external client, which will save you time and prevent mistakes. This means going through a checklist on the assignment’s characteristics and collecting all key information. If you’re carrying out a valuation as an external Read more about THE INFORMATION BASE IN VALUATION[…]
In a valuation, nothing can be viewed in isolation, you always need to consider the overall picture. However, the big picture is also made up of many sources, inputs, logical decisions and methods, without which the overall picture would no longer make sense. Because the value of a company is not to be viewed in isolation, Read more about DECODING THE VALUATION PROCESS[…]
Until recently few countries had released their own valuation standards. With the market demanding stronger valuation standards, many countries have started working on their own guidelines. The International Valuation Standards Council, for example, seeks to unify these standards. However, the local standards tend to go more into the technical valuation details. The OIV (Organismi Italiano di Read more about AUSTRIAN, GERMAN AND ITALIAN VALUATION STANDARDS AT A GLANCE[…]
Business valuation is a constantly evolving science, shaped by empirical research, opinions of leading experts and the judgement of the valuer. It is impossible to pinpoint the exact intrinsic value of a company, so all methods are aimed at detecting and quantifying as many factors as possible that can have an influence on the Read more about WHO CAN VALUE YOUR COMPANY?[…]