‘What is my business worth?’ is a question every entrepreneur and investor asks themselves all the time. Then when it comes to selling the company or raising money the question shifts subtly to ‘what value will the investor/acquirer place on my business?’. The answer to the second question is often lower than the answer to the first one.
If you are trying to answer the question ‘what value will an investor place on my business?’ I think there are three things you need to understand. The first is what I would describe as the right way for a VC to value a company, the second are the rules of thumb that we use to sense check and short cut the proper analysis, and the third is the impact of market forces on the numbers thrown out by the first two.
To read the full, original article click on this link: How does a VC value a business? « The Equity Kicker
Author: Nic Brisbourne
