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About Company Valuation
Company valuation is a process and a globally recognized valuation method used to determine what a business is worth. The value of a business depends on two things: the capability of a business to generate profits and the risks associated with such profits. Company valuation results depend on your business assumptions, ability to visualize your future and calculate the risk associated with the growth of your business.
Business value is really an expected price the company would sell for, or shares may be sold to an investor. The real shares price may vary quite a bit depending on who determines the business value.
Why valuation of a Company is required?
- Business is in the Startup Phase.
- CEO need to Provide Quarterly or Annual Updates.
- You are planning to raise Fund from venture capitalist firm.
- Planning to Sell a Business.
Business valuation method for early stage startups
- Comparable Transactions.
- Discounted Cash Flow.
- Exit Strategy and Investment Stage.
- Potential and Talent.
- Asset Valuation.
- First Chicago Method.
Frequently Asked Questions
Valuation Consultant is an individual or a company that estimates the value of the business. Valuation consultants are used for the business valuation purpose to know the real value of the business. A valuation consultant will provide the market value of the business, compliance requirements of the business.
In order to prepare for a valuation interview, the business individual needs to have the following considerations in mind:
• Type of Business Valuation method Use
• Cost of Valuation
• Knowledge of Cash Flows and Operational Aspects related to the business