Valuation
We have blogs in six categories. Click on the category name in the menu below to see blogs in that category. You can also use the search function.
July 10, 2024
Ultimate Guide to Valuation of Pre-Revenue Startups
Being confronted with having to value your venture without any financial data and often without proper finance training is the nightmare and reality of every startup founder. You don’t want to sell yourself short, and at the same time, you don’t want to seem unrealistic and lose a chance to raise capital.
There is a lot of confusion in the startup community around how accurate a valuation for a company with no financial history and no revenues can be and what exactly it measures.
We are here to help you understand all these topics
December 5, 2023
How to Value Early-Stage Startups?
There are two valuation methodologies for early-stage startups: qualitative and quantitative. All qualitative approaches are based on some sort of scorecard. Quantitative Approach allows you to assess the financial feasibility of your business plan and represents a more accurate value of your company. Learn more in the article.
November 19, 2023
WACC vs Investors’ Return
The difference between WACC, or Weighted Average Cost of Capital, and the investors’ return confuses many entrepreneurs, especially those with very little finance knowledge. Both are important valuation concepts and will definitely come up in your fundraising process. In this article and the corresponding video, we will learn what they are, how they differ from each other, and how to calculate them.
October 19, 2023
What Drives Startup Valuations?
There is a lot of confusion around what startup valuations are really based on.
To start off, let’s understand what they ARE NOT based on:
Numbers taken from the sky, or unjustified projections
Wishful thinking
Desired percent of equity that you “think” you should give away
To drive the point home, you can’t just say: “I think I am going to generate $1M in Year 1, $5M in Year 2, $25M in Year 3, $50M in Year 4, and $100M in Year 5”, just because those numbers seem reasonable, and even if other startups have similar projections.
January 31, 2022
What Does a Startup Valuation REALLY represent?
Being confronted with having to value your venture without any financial data and often without proper finance training is the nightmare and reality of every startup founder. You don’t want to sell yourself short, and at the same time, you don’t want to seem unrealistic and lose a chance to raise capital.
January 31, 2022
The Impact of Valuation On Your Equity Stake
Many startup founders don’t fully understand why it is important to have a company valuation, especially at an early stage. We demonstrate how a company valuation affects the amount of control you, as a founder, are going to have and how much money you end up making in case of an exit with a help of a fictional example.
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