How To Value A Startup
While much has been written over the years on how to value established businesses, there is very little around on the valuation of startups. Pre-revenue businesses, by their nature, don’t lend themselves easily to earnings based valuation methods and any earnings projections used in the calculation are subjective and prone to error.
Tommaso’s article at Medium addresses this shortfall and provides a useful guide to valuing startups.
Business valuation of any kind is never cut and dry. For startups with little or no revenue and an uncertain future, assigning a valuation is especially tricky. For mature businesses that are publicly listed and have a steady revenue, there are specific facts and figures to use to determine a value. However, a startup is much more difficult to value since it is likely nowhere near making relevant sales. If you need to raise capital for your startup, it’s important to determine what your startup’s value is. But do how to best value your startup? Read the article here.
