7 Valuation Methods
Credit to Bojan Radojicicย who nailed it.
๐ฆ๐๐ฎ๐ฟ๐๐๐ฝ ๐ณ๐ผ๐๐ป๐ฑ๐ฒ๐ฟ๐: fueled by passion, innovation, and big dreams.
But amidst all the creativity and enthusiasm, there's a critical aspect that often takes center stage:
Startup Valuation! ๐ผ
Understanding the value of a startup is more than just a number.
It's a strategic compass that guides your fundraising efforts, informs investment decisions, and shapes your company's trajectory.
Here's why startup valuation is a crucial piece of the puzzle:
1๏ธโฃ Fundraising and Investment Decisions
2๏ธโฃ Equity Allocation and Employee Incentives
3๏ธโฃ Strategic Growth Planning
4๏ธโฃ Acquisitions and Partnerships
Why do you need these 7 models?
ย ๐น ๐ง๐ถ๐บ๐ฒ-๐ฆ๐ฎ๐๐ถ๐ป๐ด ๐ฎ๐ป๐ฑ ๐จ๐๐ฒ๐ฟ-๐๐ฟ๐ถ๐ฒ๐ป๐ฑ๐น๐
Valuation calculators streamline the valuation process, saving you valuable time and effort.ย
ย ๐น ๐๐ฎ๐๐ฎ-๐๐ฟ๐ถ๐๐ฒ๐ป ๐๐ฒ๐ฐ๐ถ๐๐ถ๐ผ๐ป ๐ ๐ฎ๐ธ๐ถ๐ป๐ด:ย
These calculators are built on robust algorithms, taking into account critical financial data. This helps you to avoid guesswork and bias.
ย ๐น ๐๐ฑ๐๐ฐ๐ฎ๐๐ถ๐ผ๐ป๐ฎ๐น ๐ง๐ผ๐ผ๐น:ย
By understanding the factors that influence your startup's value, you'll gain a deeper comprehension of your business's strengths and areas for improvement.
ย ๐น ๐๐ผ๐ป๐ณ๐ถ๐ฑ๐ฒ๐ป๐ฐ๐ฒ ๐ถ๐ป ๐ก๐ฒ๐ด๐ผ๐๐ถ๐ฎ๐๐ถ๐ผ๐ป๐: Armed with a well-informed valuation estimate, you can confidently negotiate with investors or potential partners, knowing that your offer is grounded in data and market realities.
7 methods: explanation of when the method is appropriate to use and valuation calculation under given assumptions
ย โข Discounted cash flow method
ย โข Valuation by multiple (EBITDA or Revenue/ARR)
ย โข Comparable companies method
ย โข Replacement cost method
ย โข Net book value method
โข Berkus method
โข Venture capital method
Attaching a nice image by him.

This is nice one Ranjan Sir. Very informative and important for early stage founder. I like Venture Capital method for tech and deeptech to get higher valuations. However most revenue based companies will use DCF method