Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

How do you get a good startup valuation?

Everyone talks about fundraising, the process, etc. but never have really experience a conversation or a dialogue in which someone explains what is the true process to receive a rock solid valuation. Can you all share some knowledge with all of us please?

10 Replies

Tony Dobaj
0
0
Tony Dobaj Entrepreneur • Advisor
CTO at Bizzz
Frankly until a priced round there's no such thing as a rock solid valuation. But doing some forecasting based upon thoughtful assumptions can help you defend the number you pull out of a hat.
Arthur Lipper
0
0
Arthur Lipper Entrepreneur
Chairman of British Far East Holdings Ltd.
The other and better approach to the financing of a new business is a sale to investors of an agreed percentage of the company's revenues for an agreed period. This is called a royalty and does not represent any ownership of the business, just an ownership of the agreed percentage of revenues.To learn all about royalties see www.Royalties.Website. Arthur
Jerome Peloquin
0
0
Jerome Peloquin Entrepreneur • Advisor
President, Family Fish Farms Network, Inc.
As a start go to Kahn Academy and go through their short course on Equity and Dilution ... I am assuming you have a busness plan, if not ... god bless you. Here 's what we did... we took our forecasted EBIT (earinings before interest and taxes) after 3 years and multiplied by two ... it is as good as anything if you are a pre cash start. jj Jerome Peloquin President The Family Fish Farms Network, Inc. 717 Lawrence Street, NE Washington, DC, 20017 cell: (410) 227-0498 (Skype) fishfarms1 LinkedIn Profile email: [removed to protect privacy] website: www.thefamilyfishfarmsnetwork.com We grow healthy local food ... save fresh clean water ... create decent paying jobs.
Martin Omansky
0
0
Martin Omansky Entrepreneur
Independent Venture Capital & Private Equity Professional
(1) Pre-revenue valuations are usually arbitrary, except in the rare case when (2) the deal features previously successful entrepreneurs, superstar scientists or engineers, significant and protectable intellectual property, endorsements, including a major financial investment from a large company, or very large market potential. Sent from my iPhone
Rob Gropper
0
0
Rob Gropper Entrepreneur
Director at PetHero, SPC - Member at Eastside Incubator - Principal at Tuxedo Technologies Group
it's more art than science. each area of the country (silicon valley V Seattle, V Austin, etc.) seem to have their own idea of what a X stage consumer tech startup is worth V a b2b SaaS startup, biotech, etc. It seems to have more to do with investor competition for comparable deals. That competition occasionally leads to bubbles and a resetting of valuations. You have to ask around your startup community and look for "comparables". This is very different from the valuation process for a local consulting firm or dentist practice or restaurant. The folks that do those sorts of valuations would like you to think it is much more scientific and objective, but it really comes down to some multiple of EBITDA for that sector.
Arthur Lipper
0
0
Arthur Lipper Entrepreneur
Chairman of British Far East Holdings Ltd.
This is only a consideration if you are selling equity. The use of royalties avoids these considerations. Arthur
Jerome Peloquin
0
0
Jerome Peloquin Entrepreneur • Advisor
President, Family Fish Farms Network, Inc.
I am not in the same league with Arthur ... it is a sticky wicket for sure as no operating numbers and virtually no assets make valuation problematic ... here's how I proceded. An idea is the start and has no value (position one) however after you write a competent business plan with both pro forma and financial schedules for all assumptions, you now have value as it is an idea with an operating model of sorts ... as you move from business plan to operating plan that value grows. For example if you were to be captured by space aliens then, aome future MBA skilled in the art of start ups could take your plan and implement it ...and as you move from operating plan to "prototype,' that vaue continues to increase ...the question is ...how much? I used 50% of EBIT in year 5 of our formal business plan PS... no one bought it but they respected my argument
Irwin Stein
0
0
Irwin Stein Advisor
Very experienced (40 years) corporate,securities and real estate attorney.
You can buy an established operating company in many industries for an average of 3 times next year's earnings. A start-up with no current earnings is guessing about next year so I would discount from their projection. What is remarkable are the start-ups that getting funding with either enormous earnings estimates that they will never reach or enormous sales projections even though they will operate at a loss.
Arthur Lipper
0
1
Arthur Lipper Entrepreneur
Chairman of British Far East Holdings Ltd.
Why be concerned by valuation except as control maintenance? If you raise capital by selling a percentage of future revenues you do not have valuation concerns.
Andrea Gentili
0
0
Andrea Gentili Entrepreneur
COO (and co-Founder) at Kobo Funds
The only way to have a solid valuation is to have a good idea, in a growing market, and to produce a very credible Business Plan to be implemented by a competent and experienced management team.
The exact valuation depends very much on the perceived risk of the deal...that's why EV cannot be a science
Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?