Venture Financing:

Business Valuation

Valuation of a Start-up Company

Valuation of start-up companies is highly subjective. It is rather art than science. Proper valuation of the entrepreneurial business is the seminal event in the corporate maturation process however and it becomes an absolute requisite when the entrepreneur wants to raise private or public capital. Once the company is properly valued, then the entrepreneur can determine how much of the company can be sold for the capital injection provided by the investor or venture capitalist. No matter how enthusiastic each party seems, it always comes down to valuation.

The  most common start-up business valuation approaches include:

1. Cost approach (uses the valuation information to restate the asset at fair market value)

2. Market approach (gathering data to value developing assets; uses actual market derived data, comparing and correlating subject company to market comparable)

3. Income approach (connects data to value of developing assets).

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Calculates the present value of any investment project or company share based on forecast cash flows and income proformas or actual data. Quick valuation of any project or business, or option using cash flow forecasting, black-scholes formula or earnings forecasts. Provides five, ten, fifteen and twenty year value basis, share value and net worth.