Valuation Model

It has often been said that establishing the value of an early-stage company is an art rather than a science. Why? Because there are so many unknowns about early-stage companies and their future prospects. When will revenues begin to ramp? What if milestones take longer than expected to achieve? What if customers don’t buy the product or service?

Uncertainties make many of the traditional valuation methods such as discounted cash flow analysis, payback formula, and similar tools difficult to apply. These analytical techniques require educated guesses on assumptions and a multitude of variables.  Consider the experience of buying a lottery ticket with no assurances the ticket will be a winner. If you had a crystal ball and knew the lottery numbers ahead of time you would win each time you bought a ticket. But, of course, if you were in that situation, you wouldn’t need investors anyway!

 But your company isn’t the lottery; you don’t have a crystal ball and the company’s value does have to be established somehow. You as the entrepreneur and your investors have to agree, so that a fair exchange can be realized between the receipt of cash and the exchange of shares. 

Establishing a company’s valuation is key to the entire negotiation process. It is also the fundamental determinate of capitalization tables, term sheets and investment agreements.

It’s a difficult task to establish a company’s valuation – particularly a start-up company. This simulation tool helps establish valuation estimates as guidelines for discussion with investors.

Valuating a company is an art; yet this tool gives an entrepreneur an idea of what constitutes value. The model is easy to use and is interactive. It covers discounted cash flow analysis, comparables approach and weighted valuation. Input cells are easily identified with clear instructions for use.

Price – US$19.95

Valuation (DCF, multiples, judgemental) model

It’s a difficult task to establish a company's valuation - particularly a start-up company. This simulation tool helps establish valuation estimates as guidelines for discussion with investors. Valuating a company is an art; yet this tool gives an entrepreneur an idea of what constitutes value.

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