Valuation Guide - Hemant Kanakia

1,522 views

Published on

Presentation delivered by Hemant Kanakia at the TiE Workshop on "Valuation of Startups" at Mirchi Upswing SME Conclave 2011

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,522
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
28
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Valuation Guide - Hemant Kanakia

  1. 1. Let’s Avoid Being Valued!×  Bootstrap×  Family Money×  Friends & Family Money×  Strategic Source of MoneyGOOD LUCK!! But, sometimes that is a wrong strategy
  2. 2. Early-stage companies..×  hard to value – for anybody.×  important to arrive at a ``correct” valuation ×  Define what is ``correct”? ×  One that leads to having best chance of getting funded at the next round, ×  One that keeps both hands clapping together ×  One that attracts the right kind of capital source ×  One that weeds out the wrong kind of entrepreneur
  3. 3. Research Comparables×  I don’t pay attention to how much P/E multiples you will have in year 4 or 5 or 7. If you already can know that … god bless you. It is not a VC kind f funding opportunity×  Research comparable start-ups in similar domain and be realistic in attaching premiums for experienced team, etc.
  4. 4. Understand Psychology of Investors×  If investors don’t make money, neither will you.×  Dilution, Risk, Rewards, Control Premium etc. ×  Company needs total investment of 500 crore, 50 crore or 5 crore? What should be its first round valuation? ×  How much potential risk is there? ×  How much potential reward is there?×  Portfolio effect ×  8 out of 10 fails. Ok! but, mine is a surefire winner!!!
  5. 5. Love Complexity?×  Convertible debt (with or without cap on valuation)×  Valued at next round with discounts given×  Milestone driven future adjustments to valuations×  Home run clause As investor, I like to keep things simple. Either we agree on valuation or we go our own ways!!
  6. 6. Bottomline!!

×