Income-based Valuations
Income-based valuations are a crucial tool for investors and business owners in determining the value of an asset based on its expected financial performance. But they are not the only way to go.
Income-based valuations are a crucial tool for investors and business owners in determining the value of an asset based on its expected financial performance. But they are not the only way to go.
Many factors weigh on the valuation of a company, and for sure there are no two businesses alike. Furthermore, even similar companies find themselves at different stages of their lives when they start talking with investors and buyers: some are consolidating while others are expanding; some are profitable right away and others are not for a long time; some are not even generating revenues when they are acquired.
But a very effective way to monitor the market (albeit quite simplistic) is to benchmark the M&A activity in a specific sector and in a given period. Markets go through different phases after all and there might be more or less appetite for companies like yours, and therefore investors might be inclined to accept higher or lower valuations.
Early-stage valuations may feel uncomfortable for both founders and investors… Is there a simple way?
We are happy to announce that we’ve partnered with Equidam: an online platform for startup valuation that enables entrepreneurs to understand their valuation, transparently discuss it, and close fair deals.
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OUR MANIFESTO: The world advances thanks to the effort of single brave individuals that innovate starting from zero. All successful companies become institutions sooner or later, and loose the ability to change and fuel progress. And the advancement of our human race is left in the capable hands of Founders and Entrepreneurs.