For nine startups valuation method


Source: StephaneNasser36 krypton a start-up company is like a box。 A very special box。 This is a start-up box has a value。 The more you put something in the box, the higher its value。 Increased patent, increase the value of the box。
Placing an exciting management team, increase the value of the box。 Very simple, right?Your start-up company is now a value of 2。 great!The Magic Box。 When you put $ 1 on the inside, it will return you $ 2, $ 3 or even $ 10 is amazing!I would like to build a small box for yourself!The problem is that the construction of a box can be very expensive。 So you need to visit those who are rich – let's call investors and provide them with a sound like such a deal: "Give me a million dollars to build a box, you get the output by its X X% but it depends on how much should be pre-money valuation, such as value investing time box。
However, the calculation currency trading before the valuation is tricky。
This article will walk you through nine different valuation methods to better let you know how to determine the pre-money valuation。 Nine kinds of assessment methods: Please note that most valuation methods are based on comparable assets or benchmark valuation data。 How to find such data itself is a problem, it will not solve, but it is likely to be published in a future article。
1。Assess your startup Berkus case method Berkus case method is to use a simple rule of thumb to estimate the value of your box。 It is the writer and business angel investors name DaveBerkus design。
The starting point is: Do you believe in the first five years, the case of income can reach $ 20 million it?If the answer is yes, then you can assess your case based on five key success factors for the construction of the box。 This will give you a rough idea of your box worth (AKA pre-money valuation), and more importantly, you should make that improvement。
Please note that, according to Berkus case law, in the absence of income, the valuation of the box should not exceed 2 million。
Berkus method is applicable to the case have not yet operating income of start-up companies。
2。For your start-up company to assess risk factors RFS summation method or methods with risk factors summation method is based on the case method Berkus, a little evolution over a version of。 First, determine the initial value of your box。 Then, based on the establishment of a box of 12 risk factors inherent to adjust the value of the box。 This initial value is determined as an average box-like in your area, the risk factors in multiples of $ 250,000 as a standard, from a very low risk of $ 500,000, to the very high risk – $ 500,000 valuation。
In fact, the most difficult part here, in most other assessment methods are also encountered, is to find data about similar box。
Risk factors summation method is suitable for the early start。
3.Valuation scorecard valuation of your start-up companies with a scorecard valuation method is more sophisticated approach to the valuation of the box。
It is calculated at the beginning of the risk factors and the way the same sum method, i.e. determination of the basic box your estimate, and then in accordance with a set of criteria, adjusting the valuation。 These standards themselves, they will cause much impact the overall success of the project to measure。
In addition, no other new things。 Your box% higher than the average box-like: This method can also be the name of BillPayneMethod title, it involves six criteria: management (30%), size of the opportunity (25%), products or services (10% ), sales channel (10%), operational phase (10%) and other factors (15%)。 Scorecard valuation method has not yet been applied to operating income of startups。 4.Using comparable transactions method for your startup trading method for evaluating comparable in fact only three rules。
According to the type of box you're building, you need to find an indicator, it will be representative of your box。
The index can be for your business: monthly recurring revenue (SARS), human resources personnel (temporary), the number of outlets (retail), patent applications (Medtech / Biotech), weekly active users or WAU ( messenger)。
In most cases, you can only profit from the income statement: sales, gross margin, EBITDA, etc.。 According to take into account the comparability of the box valued at $ 685 to $ 6736 or comparable transactions method is applicable to income before income generation and after the start-up company。
5.With "book value method" to assess your start-up companies forget how amazing box is to see how many cardboard boxes it's worth one pound。 Book value is the net worth of the company, namely tangible assets of the box, that box "hardware"。
"Book value method" is particularly important for start-up companies, because it focused on "tangible" value of the company, and most startups are focused on intangible assets: RD (for Biotechnology), user groups and software development (network start up)。
6.To calculate your start-up companies from the seller's point of view, it is difficult to say this is a good deal, liquidation value is its name implies, when business is canceled, the liquidation value of the property using the liquidation value method。
It can be incorporated into liquidation value of all tangible assets: real estate, equipment, inventory…These so you can find a buyer in a short time all assets。 The idea is: If I'm in less than two months to be able to sell the company, how much money can?On the other hand, all intangible assets in the liquidation process is considered to be worthless (assuming that is, if worthwhile, it will before you went into liquidation, has been sold)。
For example: patents, copyrights and any other intellectual property rights。
In fact, the scrap value is the liquidation value of all tangible assets and。 For investors, the liquidation value as an assessment of investment risk parameters useful: a high potential liquidation value means lower risk。 For example, all other things being equal, it is best to invest in a owned equipment, rather than to lease equipment。 If everything went wrong, you went out of business, at least you can get some money to sell these devices, but if you are leasing, then you get nothing。 Then the book value and the liquidation value what difference does it?If a startup really have to sell their assets in case of bankruptcy, due to the unfavorable conditions of sale, the value of which is obtained from the sales could be lower than its book value。
So liquidation value Book value。
While these two assets are tangible assets, but the value of the background of these assets is not the same。
As BenGrahampoints said, the liquidation value of the assets from the shareholders can measure the time from the business, while the book value to measure assets invested their business。 7.With "discounted cash flow" method to assess your start-up companies (DCF) if your box works well, bring some cash every year。
So, you can say that the total value of assets of the box is the sum of all future cash flows for the next few years of。 This is the basis of the discounted cash flow method (DCF) behind。 Suppose you are investing in cash flow ň。
What happens after?This will be the final program of value (TV) to be solved 1: Do you think business will maintain steady growth, and?After years of uncertainty continue to create cash flow amount。
Well, you can use this formula to calculate the final value :: TV = CFn1 / (RG), "R" is the discount rate, "G" is the expected growth rate。
Option 2: You?After deadline consider withdrawing。
First, you want to estimate the future value of acquisitions, such as the way comparable transactions (see above)。
Then you must deduct the value of the future to get its net present value。
TV = exit value / (1R) ^ N Although technically, you can use it to calculate the income after start-up company, but that does not equal the value of start-ups。 8.With First Chicago method to evaluate your venture company First Chicago method required to answer a particular situation line: If there is a small chance that you will become a box big box, how would you assess this potential?First Chicago method (first in Chicago and later in a bank name, if you want to know the name of the source words) to address this issue through three valuation: worst case (small box), normal (normal case), the best case (big box)。 Value box, magic happens every valuations are used discounted cash flow method (or, if not possible, use a formula or a multiple internal rate of return)。
Then, you can make a decision based on the percentage probability of occurrence of each case reflects。
According to "First Chicago Law", your valuation is the average of each case。 The first method is suitable for a Chicago start-up companies after earnings。 You can read more about the first Chicago law。
9.As the name implies assessment of your start-up companies with venture investment, venture capital from investors point of view method。 An investor looking for a specific return on investment, say 20 times。
In addition, according to industry standards, investors believe that your box can sell for $ 100 million in eight years。
Based on these two factors, investors may be adjusted after dilution, to easily determine that he / she would like for you to invest maximum price。 Venture Capital method is suitable for business after earnings before investment income。 The best method of valuation is…Congratulation!If you do, you will know that nine kinds of valuation methods。
So you might scream: What is the best method of valuation?First of all, remember that the only way to really use venture capital is comparable manner, also takes into account the degree of dilution of the founder of rough acceptable。 For example, in the seed round between 300,000 to 500,000 euros, the given 15-25% of revenue, or to ensure founder remains the largest shareholder after the A round status。
Secondly, let us remember that valuation is just a stereotypical estimate。 Valuation never show the true value of your company。 They only show two things: (1) the market is willing to give you the little red box price is how much of the investment, (2) you are willing to accept the minimum amount of money to accept it。
Having said that, I found that the best method of valuation is by the early investors OtiumCapital of PierreEntremont described。 He said, you should start with determining the start of your needs, then according to the needs, talk diluted question: Valuation is a good starting point when considering financing。
It helps to establish the figures given argument, rather than simply discuss。
In any case, for a more important game in terms of supply and demand, they are just theories introduced it。