Start-up valuation services : Definition , Types and Benefits ?

 

Start-up valuation is the process of assigning a number to the worth of a start-up as a potential business. In simple terms, it quantifies the value of a company. Every entrepreneur needs to undergo this process when searching for a co-founder or equity-raising funds from the market.

 

When the funds (personal equity/bootstrap) are insufficient, the start-up valuation services serve as a bridge between the VCs, the angel investors, or other start-up enablers and the start-ups. The start-up valuation service provider also helps identify project risks and return on investment (ROI) for the project. This is critical information that the investor often uses before deciding on an investment. The services offered by these start-up valuation firms also include litigation, dispute resolution, and strategy development in addition to assistance with different compliances and financial reporting. 

 Types of start-up valuation

  • The Berkus method - The method projects the value of the start-up in the pre-revenue phase by assigning monetary value to five fundamental metrics of success, which are as follows:
  1. Basic value,
  2. Technology,
  3. Execution,
  4. Strategic relationships in its core market,
  5. Production and sales.
  6. Team (Founders)

Benefits of start-up valuation

This is an enabler in designing the action plan for achieving the targets. A proper valuation report aids in finding good insurance offers that are valuable in protecting the business from any uncertainty. It is essential for maximizing and leveraging an organization's negotiating power; once the actual value is known, the company gets a clear comparative advantage in the market. 

Source Url : https://www.resurgentindia.com/start-up-valuation-services-all-you-need-to-know

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