Start-up Business


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How to value a startup business? Methods to value start-up business. Why do you need to value a startup business though you are not selling it?

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Start-up Business

  1. 1. MY START-UP BUSINESS HOW TO VALUE Thursday, 4 July 13
  2. 2. Value A Start-up Business No Goodwill No Income Pattern Only Assets, Ideas and Market Assessment Generally it is said that valuing a start- up business is more art than science. It looks to the future more than any other valuation method Thursday, 4 July 13
  3. 3. How Do You Value A Start-up Business •Market forces of the industry & sector in which it plays, •Balance between demand and supply of money, •The size of recent exits or sales •Willingness of investor to pay a premium to get into a deal •Desperation of the entrepreneur looking for money •Assets of the business •Looking into the Future Thursday, 4 July 13
  4. 4. Methods To Value A Start-up Business A cost approach attempts to measure the net value of the business today by calculating how much it could cost for a new effort to replace key assets - it is one of the best way to value a startup business but will probably lead to a low valuation. Also called the “cost to create” approach Thursday, 4 July 13
  5. 5. Methods To Value A Start-up Business Since there is often very little or no income, a valuer will use the Discounted Cash Flow method to forecast and value future cash flows. Thursday, 4 July 13
  6. 6. Methods To Value A Start-up Business Another popular method to establish the value of any startup business is to search for similar companies that have recently received funding or been sold. This is called the market approach. Thursday, 4 July 13
  7. 7. Why Do I need To Value A Start-up Business When I Am Not Selling It? Valuing a startup business when you are running it helps you to know the strengths and weaknesses of your business and can help you in maximising your profit and value. Thursday, 4 July 13
  8. 8. Why do I need to value a Start-up Business when I am not selling it? You never know when you need extra debt or equity finance. To sell equity in your business you need to know the total value of it. Thursday, 4 July 13
  9. 9. Why do I need to value a Start-up Business when I am not selling it If you have an exit strategy and a target price, you know how far short of that price you are if you know the current value. Thursday, 4 July 13
  10. 10. For Advice on your Business Valuation BCI Business Brokers Tony Arena (Managing Director) 3/1 Alexander Street, Crows Nest, NSW, 2065 Phone: +61 2 9439 3399 Mobile: +61 411888148 Email: Thursday, 4 July 13
  11. 11. Maximise Business Value For help in maximising your business value take a look at our product here Thursday, 4 July 13
  12. 12. For A Free Consultation On The Value Of Your Business Please visit our website Thursday, 4 July 13