In this presentation we take a look at the main five methodologies for valuing a startup company, from both a qualitative (early stage) perspective and a quantitative (later stage) perspective.

1. | © 2022 EQUIDAM Valuation S.L. - CONFIDENTIAL
VALUATION METHODS
1
All methods are trying to compare prices for risk/return, some are very direct, some
are more subtle
Risk/Return
Comparison Intrinsic value
Crude Refined
- Book Value
- Cost-to-duplicate
- Multiples
- Scorecard
- Checklist
- DCF
- VC Method
- Real Options

2. | © 2022 EQUIDAM Valuation S.L. - CONFIDENTIAL
MULTIPLES
2
Very famous
EBITDA or REVENUE or USER Multiple
Valuation = Multiple * Underlying Metric
Multiple = average or median of multiples of
similar companies
PROs:
Quick and easy
CONs
Difficult to find reliable data
Way too simplistic for early stage

3. | © 2022 EQUIDAM Valuation S.L. - CONFIDENTIAL
SCORECARD
3
x Average valuation of similar companies
Early stage refined comparison
PROs:
Detailed qualitative analysis
Allows to insert investor preferences
CONs
Little financial element
Difficult comparable data

4. | © 2022 EQUIDAM Valuation S.L. - CONFIDENTIAL
CHECKLIST
4
Another early stage refined comparison
PROs:
Detailed qualitative analysis
Allows to insert investor preferences
CONs
Little financial element
Difficult comparable data

5. | © 2022 EQUIDAM Valuation S.L. - CONFIDENTIAL
DCFs
5
The one used for everything
PROs:
Detailed financial analysis
Puts returns in broader context
CONs
Little qualitative analysis
Sensitive to discount assumptions

6. | © 2022 EQUIDAM Valuation S.L. - CONFIDENTIAL
VC Method
6
Can be done in your head
PROs:
Quick and easy
Keeps perspective on the end goal
CONs
Little qualitative analysis
Very sensitive to discount assumptions
A bit simplistic and not precise

7. | © 2022 EQUIDAM Valuation S.L. - CONFIDENTIAL
CONs
Very difficult to calculate
Often all options already in projections
Real Options
7
When math takes the lead
PROs:
Focus on possibilities
Today
Option 1
● Return
● Probability
● Variance
Option 2
● Return
● Probability
● Variance
Option 3
● Return
● Probability
● Variance

8. | © 2022 EQUIDAM Valuation S.L. - CONFIDENTIAL
CONs
Backward looking
Accounting rules make this a lowbound
Digital businesses create intangibles that are
not measured and measurable
Return a low estimate most of the time
Book Value & Cost to Duplicate
8
For certain circumstances
PROs:
Give a useful baseline
Investigate the past of the company
Useful in specific circumstances
- when the team will not continue
- when the assets of the company are the
main value

9. | © 2022 EQUIDAM Valuation S.L. - CONFIDENTIAL
VALUATION METHODS
9
All methods are trying to compare prices, some are very direct, some are more subtle
Risk/Return
Comparison Intrinsic value
Crude Refined
- Book Value
- Cost-to-duplicate
- Multiples
- Scorecard
- Checklist
- DCF
- VC Method
- Real Options
For startups, we don’t
believe in these methods
- They reflect the past
- Intangibles are not
considered enough
- There is too much uncertainty already

10. | © 2022 EQUIDAM Valuation S.L. - CONFIDENTIAL
VALUATION METHODS
10
Why 5 methods?
Always take into account more than one
- Each has a different point of view
- Each has different biases
- Each has a different take on comparing risk and return
Our 5 methods and how they work together
- Qualitative as the baseline
- VC relatively stable in the middle
- DCF to account for specifics of the plan that can change