As I brush up on my startup valuation skills, I tap experts like Bill Payne. He is a founding member of four angel groups, an investor in more than 50 companies and a long-time instructor of angel investing courses. While there are dozens of valuation methodologies, he suggests these four that work for angels and startups. These offer an excellent starting point:
- Venture Capital Method calculates valuation based on expected rates of return at exit.
- Berkus Method attributes a range of dollar values to the progress startup entrepreneurs have made in their commercialization activities.
- Scorecard Valuation Method adjusts the median pre-money valuation for seed/startup deals in a particular region and in the business vertical of the target based on seven characteristics of the company.
- Risk Factor Summation Method compares 12 characteristics of the target companyto what might be expected in a fundable seed/startup company.
via www.forbes.com
I recently met with 2 French entrepreneurs from the bay area.
After their pitch, we discussed valuation. I got surprised on how they valued their company. It reminds me of this article where there are a few angles to back up your valuation.
there a tool that basically comprises all of these methods and it's free to use: it's called Equidam com
Full disclosure: i'm one of the founders.
Posted by: LuckyValentini | March 09, 2015 at 11:30 AM