Sasin Entrepreneurship October Sundowner - How to come up with your company’s valuation by Surasit Sachdev (21.10.15)
•
0 likes•263 views
This document provides guidance on how to value a company for potential investment. It lists several factors to consider in determining valuation, such as business model, sales projections, costs and comparable transaction values. Methods mentioned include market, revenue and asset-based valuation as well as discounted cash flow. The acquisition of WhatsApp for $19 billion is examined, noting its $20 million annual revenue and 450 million active users. Terms like pre-money and post-money valuation are also defined.
Recommended
Recommended
More Related Content
Similar to Sasin Entrepreneurship October Sundowner - How to come up with your company’s valuation by Surasit Sachdev (21.10.15)
Similar to Sasin Entrepreneurship October Sundowner - How to come up with your company’s valuation by Surasit Sachdev (21.10.15) (20)
Recently uploaded
Recently uploaded (20)
Sasin Entrepreneurship October Sundowner - How to come up with your company’s valuation by Surasit Sachdev (21.10.15)
- 1. HOW TO COME UP WITH YOUR COMPANY’S VALUATION? h"p://bit.ly/sundownertalk
- 2. WHY SHOULD YOU VALUE COMPANY • To get external investment • To know whether this company is worth spending time on or not (Is this a lifestyle business or a Scalable Start Up)
- 3. CHECKLIST TO COME UP WITH YOUR VALUATION • Business Model(Commission, Ads, Listing Fee etc) • Sales Projection (Unit sold, Market Size, etc) • Setup Cost (Tech Cost, Factory Setup, etc) • Operating Cost (Salary, Rent, COGS, etc) • Sales / Marketing Cost (Advertisements, Commissions, etc)
- 4. DIFFERENT METHODS TO VALUE YOUR COMPANY • Market & Transaction Based Comparable • User Base Comparable(Tech industry) • Revenue Comparable • Asset Based Valuation • Discounted Cash Flow (DCF)
- 5. LET’S LOOK AT $19BN WHATSAPP ACQUISITION • Revenue = $20mn / year(normal company would require Whatsapp to have about $1.5bn after-tax income to get $19bn valuation) • Active User Base = $450mn • At that point, Facebook was trading at $145/user, Twitter was trading at $128/user • Facebook paid Whatsapp at $42/user
- 6. VALUATION TERMS WHEN TALKING TO AN INVESTOR • Pre-money Valuation vs Post-money Valuation • Pre = Valuation minus Investment • Post = Valuation including Investment • Break-even Point • How many months will you need to get to cash flow positive • Payback Period • How many months will you need to recover the investment • Average Burn Rate • How much money are you spending per month on Operating Cost
- 7. FACTORS THAT AFFECT VALUATION (LATE STAGE) • Good Will • IPs (eg. Google bought Motorola for $12bn & sold for $3bn) • Brand Value • Team (Acqui-Hire) • Synergy • Buy to monopolize the market (eg. Expedia) • Replacement cost for another company • Eg. OpenTable & Priceline • User base value to another industry • Eg. Whatsapp, SnapChat
- 8. LET’S GO TO THE FINANCIAL MODEL h"p://bit.ly/sundownertalk