Business valuation is used to set the fair market value of the shares of a business, to know how much the business is worth. Valuation is useful in various situations, such as a transaction, tax reorganization, integration of a new shareholder or in the context of litigation. When comes the time to have their business valued, the owners’ biggest concern is to maximize the value of it.
Startup valuation is a critical and complex subject. This video is all about ‘How to build a startup valuation model from scratch using venture capital method’. Valuing mature companies is a fairly straightforward, somewhat subjective process. Things like market capitalization and sales multiples give investors a solid foundation from which to work with when determining a company’s valuation. For early-stage startups, however, the process looks quite different. In this video, they use the venture capital method from Harvard Business School to value a dining app business as it goes through three rounds of financing from angels and venture capitalists.