Written by Tom Cannon, Portfolio Manager at Seedrs, sharing his expertise and insight into startup valuation.
Are you looking to get an idea of your business’ valuation?
Startup valuations are a notoriously murky field, no more so than at the earlier stages where there is little track record to help guide you.
For entrepreneurs, calculating a good valuation for one’s business is challenging trade-off between appearing grounded yet ambitious to investors, whilst not underselling yourself and giving up more of your company than is absolutely necessary. While entrepreneurs desire for the investor to calculate the value of the company based on its future value, the investor’s instinct is to value it based on its current value.
The mutually agreed value usually reflects a number of factors, including but not limited to the number of current customers:
- total revenues
- the user
- revenue growth curve
- the business model
- the market niche
- the IP value
To help you, we’ve created this guide on understanding how to go about looking at an early-stage business valuation. In it, you’ll learn:
- The basic principles and maths behind how entrepreneurs and investors each value businesses.
- How market trends and forces influence valuations.
- The main methods used by Angels and Venture Capitalists to value early-stage and pre-revenue businesses.
- The dangers of valuing your business to high or low.
Download the startup valuation guide here and become an expert yourself.
We’ve also developed a startup valuation calculator that estimates the valuation of your early-stage business. Calculate the value of your business here.
Related content: 4 Startup Valuation Methods Used by VCs and Angels
Related content: Startup Valuation Calculator
