Before
investing in a startup, the first question that comes to mind is: what is the
worth of the company? It is pretty complex to determine the valuation of
a company before it has revenues. Unlike valuing organization with assets,
revenues, and longer track records there is no agreed upon standards for
startups.
Business Valuation is in no
way straightforward - for any organization. For startups with slight or no
revenue or profits and less-than-certain futures, the job of assigning a
valuation is particularly complicated. For mature, publicly listed businesses
with stable earnings and revenues, normally it is an issue of valuing them as a
multiple of their earnings before taxes, depreciation, interest, and
amortization or based on other business specific multiples. But it is a lot
harder to value a new project that is not publicly-listed and may be years away
from sales.
Valuation
of a pre-revenue corporation is often one of the first points of debate that
must be negotiated between entrepreneurs and angels. Entrepreneurs desire the
value to be as high as possible and angels want a value low enough so that they
own a reasonable portion of the company for the amount they invest.
A Business Valuation is the most important component of a buyer-seller
contract, which represents a working evaluation of how much you as the seller
anticipate receiving in exchange for your tangible and intangible assets.
Whereas to some extent, Business Valuation is an exceptionally
subjective process, and you can demand any price you wants for your company, on
the condition where you come across a buyer willing to pay that amount.
If
you are willing to start a startup and are looking for a consultancy that deals
with a Business Valuation in CT Connecticut, contact FoxBoro Consulting Group, Inc.
They are proficient in practical understanding of the business environment,
high-technology, manufacturing, software, and financial services. Kindly visit http://www.foxboro-consulting.com/
for more details.
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