When you buy a startup, you might actually be more interested in the TALENT that created the widget rather than the widget itself. The “acqui-hire”. This is common among Google and other large tech players. Your competitors. What are their valuations? What will other investors pay for a similar buy? It gives many investors comfort to follow a precedent, which then can lower their risk if they want to “flip” the company down the line-there’s a price that the market has already set.ģ. Your revenue. Not the best for early-stage startups, but after a company has been in business for a few years and has a stable customer base, an investor might buy a company at a multiple of 2, 4, 8, or even 16 (depending upon how lucky you get and how optimistic your investor is about your company’s future).Ģ. In simple, common-sense terms, what are these 12 methods?ġ. There are at least 12 different ways of assigning a valuation to a company.
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