Tag Archives: valuation

2 Reasons Why Market Sizing Could Be Deceiving

When screening through startup pitch decks, one key factor investors usually look at is the size of the market where the business is operating. Let’s face it – building a great product that targets a small market is not what venture capitalists look for, neither should you as an entrepreneur. On the other hand, creating a service that through a stepwise G2M strategy can reach to a wider audience with market opportunity of $4B represents a lucrative opportunity that nobody would want to miss out. However, using market sizing as a tool for filtering investments can sometimes be deceiving for 2 main reasons. Continue reading 2 Reasons Why Market Sizing Could Be Deceiving

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Seed-Stage Venture Valuation: Methodological Guide for Valuing a Startup

Early-stage startup valuation is an important topic for both founders and venture capitalists. On one side entrepreneurs want to receive recognition for their achievements so far, while on the other investors require comprehensive and adequate pricing methodology for pursuing an investment in a particular startup. However, because of the nature of the startup business and the development stage it is at, most founders seeking seed funding from angel investors, venture capitalists, or corporate accelerators struggle determining the right value of their technology venture. In most cases attracting seed funding means that a startup has negative cash flows, does not have revenues (not to mention profits), maybe but rarely possesses intangible assets in the form of an established brand or a patent deterring competition from entering their niche. Thus, using traditional valuation methods (usually in the case of public companies with millions worth of revenues) is especially arduous. As a result, you should use a set of methodologies that are typical for the specific purpose of valuing a deal at the seed stage.

Continue reading Seed-Stage Venture Valuation: Methodological Guide for Valuing a Startup