Placing a dollar value on a private company – determining its “valuation,” in investment-industry parlance – isn’t easy, especially when the company is barely more than an idea in the minds of inexperienced entrepreneurs.
So how do investors value fledgling start-up?
Many venture capitalists, such as Rick Heitzmann, will tell you “it’s more art than a science.” Mr. Heitzmann, managing director of New York-based early-stage technology investor FirstMark Capital, says factors include the track record of the founding team, the size of the market opportunity and whether the company’s product or service has already gained users or begun making revenue.
To read the original article: Is Valuing a Young Start-Up More Art or Science? - Venture Capital Dispatch - WSJ
