Miriam Dong, MBA’s Post

Yeah, happened to #venturecapital investors back in 2021. They now realize they over exposed their portfolios to VC and end up with a highly #illiquid asset class to deal with. Many of them became high-networth individuals, in paper. #Tokenization is changing that, helping a traditionally illiquid asset class to become liquid thanks to fractionalization of digital assets. Want to know more? Just shoot me a connection. Happy to connect and share the digital asset strategy of top VCs doing it for over 10 years.

What is my startup worth? A Founders Guide   The secret: valuations are more art than science. (you still need to understand the artform)   It can be daunting to put a pricetag on your own startup. Emotional attachment, dilution, fundability, a lot of factors are at play. Seed Pre-Money valuations range from $4M - $20M (25th - 75th, Pitchbook data) - that's quite a stretch. So what's the right valuation for you? 💲 𝗛𝗼𝘄 𝗩𝗖𝘀 𝘃𝗮𝗹𝘂𝗲 𝘀𝘁𝗮𝗿𝘁𝘂𝗽𝘀 Most use a mix of methods to get a realistic band. External methods use comparables and industry-multiples, internal methods discount financials and key metrics to derive a valuation.   After a while, you develop a gut feeling for it:   The earlier the startup, the more it is art vs. science. We are talking future value, not historical facts.     💲 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗮𝗹 𝘀𝘁𝗲𝗽𝘀 𝗳𝗼𝗿 𝗳𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝟭. 𝗦𝘁𝗮𝗿𝘁 𝘄𝗶𝘁𝗵 𝘄𝗵𝗮𝘁 𝘆𝗼𝘂 𝗸𝗻𝗼𝘄 - 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝗹𝘀 - Project future financials and key metrics - What matters: Revenues, CLV, CAC, Churn, Growth - Find industry/stage benchmark metrics   𝟮. 𝗥𝗲𝘀𝗲𝗮𝗿𝗰𝗵 𝘆𝗼𝘂𝗿 𝗺𝗮𝗿𝗸𝗲𝘁 - 𝗖𝗼𝗺𝗽𝗮𝗿𝗮𝗯𝗹𝗲𝘀 - Find startups in your industry/stage - Research thir valuation, metrics and multiples - Get average valuation bands (sources: Peter Walker / Carta, Pitchbook, Dealroom)   𝟯. 𝗔𝗽𝗽𝗹𝘆 𝗩𝗖 𝗺𝗲𝘁𝗵𝗼𝗱𝘀 - Apply different valuation methods: ➺ Pre-revenue: Berkus, Scorecard. Later: VC, DCF. - Create scenarios: Worst case, best case, realistic - Your "true" valuation is somewhere in the middle   𝟰. 𝗖𝘂𝘀𝘁𝗼𝗺𝗶𝘇𝗲 𝗮𝗻𝗱 𝗔𝗱𝗷𝘂𝘀𝘁 - Soft factors: Team pedigree, IP, market opportunity - Compare your performance to benchmarks ➺ Upgrade or downgrade valuation - Factor in future rounds, dilution and your milestones     Ultimately, fundraising is a sales process: Prepare to negotiate your own ‘fair’ price. Founders - How did you define your valuation? #venturecapital #valuations #founders #startups #fundraising

Not easy to value a startup, but here are some quick tips

Startup valuation can be complex, given the challenges of limited historical financial data and uncertainty about future performance. Here are some common methods used to value startups: - Comparable Company Analysis (CCA) - Discounted Cash Flow (DCF) - Cost-to-Duplicate - Market Multiple Approach - Venture Capital (VC) Method - First Chicago Method - Scorecard Valuation Method - Berkus Method - Risk Factor Summation Method - Revenue Multiple Method Each method has its strengths and weaknesses, with the choice often depending on the startup’s stage, industry, available data, and purpose of the valuation. Investors and entrepreneurs typically use a combination of these methods for a more comprehensive valuation. For more insights on venture capital valuations, check out this post: [Link to the LinkedIn post] #startup #valuation #venturecapital #founders

insightful metrics for entrepreneurs to use to gauge expectations....

What is my startup worth? A Founders Guide The secret: valuations are more art than science. (you still need to understand the artform) It can be daunting to put a pricetag on your own startup. Emotional attachment, dilution, fundability, a lot of factors are at play. Seed Pre-Money valuations range from $4M - $20M (25th - 75th) - that's quite a stretch. So what's the right valuation for you? 💲 𝗛𝗼𝘄 𝗩𝗖𝘀 𝘃𝗮𝗹𝘂𝗲 𝘀𝘁𝗮𝗿𝘁𝘂𝗽𝘀 Most use a mix of methods to get a realistic band. External methods use comparables and industry-multiples, internal methods discount financials and key metrics to derive a valuation. After a while, you develop a gut feeling for it: The earlier the startup, the more it is art vs. science. We are talking future value, not historical facts. 💲 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗮𝗹 𝘀𝘁𝗲𝗽𝘀 𝗳𝗼𝗿 𝗳𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝟭. 𝗦𝘁𝗮𝗿𝘁 𝘄𝗶𝘁𝗵 𝘄𝗵𝗮𝘁 𝘆𝗼𝘂 𝗸𝗻𝗼𝘄 - 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝗹𝘀 - Project future financials and key metrics - What matters: Revenues, CLV, CAC, Churn, Growth - Find industry/stage benchmark metrics - Create a great P&L 𝟮. 𝗥𝗲𝘀𝗲𝗮𝗿𝗰𝗵 𝘆𝗼𝘂𝗿 𝗺𝗮𝗿𝗸𝗲𝘁 - 𝗖𝗼𝗺𝗽𝗮𝗿𝗮𝗯𝗹𝗲𝘀 (or use KAARIA) - Find startups in your industry/stage - Research thir valuation, metrics and multiples - Get average valuation bands (sources: Peter Walker / Carta, Pitchbook, Dealroom) 𝟯. 𝗔𝗽𝗽𝗹𝘆 𝗩𝗖 𝗺𝗲𝘁𝗵𝗼𝗱𝘀 (or use KAARIA) - Apply different valuation methods: ➺ Pre-revenue: Berkus, Scorecard. Later: VC, DCF. - Create scenarios: Worst case, best case, realistic - Your "true" valuation is somewhere in the middle 𝟰. 𝗖𝘂𝘀𝘁𝗼𝗺𝗶𝘇𝗲 𝗮𝗻𝗱 𝗔𝗱𝗷𝘂𝘀𝘁 - Soft factors: Team pedigree, IP, market opportunity - Compare your performance to benchmarks ➺ Upgrade or downgrade valuation - Factor in future rounds, dilution and your milestones Ultimately, fundraising is a sales process: Prepare to negotiate your own ‘fair’ price. Founders - How did you define your valuation? Thanks & Credit to https://lnkd.in/gZ6yVycw #kaaria #venturecapital #valuations #founders #startups #fundraising

The hard work of determining the evaluation of a start up.

How much is your startup really worth? Giving your startup a valuation involves assessing its fair market value. As a startup founder, I’m sure you’ve heard this saying: Valuing a startup is both an art and a science. ... and it couldn’t be more true. There is no one size fits all, but there is a method to the madness. One of our CFOs, Alan Man, found himself walking through these in a recent conversation with founders. I thought it’d be helpful for the founder community and wanted to share. Here are 5 common methods that can be used to value your startup: 🧐 The VC Model is one of the most common best practices for estimating the value of innovative early-stage businesses. It takes into account the estimated return on investment (ROI) of the venture capital firm and the price at which a business can be sold. 🧐 Scorecard or Checklist Model is used by comparing the target startup seeking investment with other startups that have received comparable funding. These startups are compared using a scorecard value model that takes into account many aspects, such as market, region, and stage. 🧐 The Berkus Method simplifies valuing early-stage startups by evaluating factors like idea strength, prototype development, initial sales, and team quality, offering investors a structured framework to assess potential value based on milestones and achievements. 🧐 Market-Based Methods value a business by comparing it to similar ones in the market, using metrics like revenue or earnings multiples, based on the principle that a business's market worth can be inferred from comparable sales in the same industry or market. Whether you're looking for investment, setting up stock option agreements for employees, or planning an exit strategy, understanding how your startup can be valued can make a significant difference to your bottom line. It’s important to note that many factors, like the economy and competition, influence valuation. Hence, many cases call for a mix of valuation analysis methods to triangulate value ranges. Save this post for later and come back to it when you need the reference 😉. #StartupGrowth #BusinessValuation #CFO #ValuationMethods #StartupFinance

How Do You Determine the Price of Your Pre-Seed / Seed Stage Startup? 💡 Valuing an early-stage startup is both an art and a science, especially when traditional methods aren't fully applicable due to unstable cash flows. Here’s a high-level explanation: Comparable Analysis 📊 Look at similar companies in your industry. What are their valuations? This can give you a ballpark figure for your startup Scorecard Method 📋 Evaluate your startup based on key factors like the team, market, product, business model, and more. Assign weights and scores to each factor to arrive at a valuation VC Method 📉 Estimate your startup's exit value and discount it to its present value (using a very high disc. rate). This approach is common for early-stage investors focusing on potential returns Revenue Multiples 📈 Use industry-standard multiples to value your business based on its revenue. For example, SaaS companies might use a multiple of their annual recurring revenue (ARR) Market Demand 🌟 The level of interest from investors can affect your valuation. High demand can drive up your valuation, while low interest can bring it down Team and Traction 🚀 The quality of your team and current traction are critical. Investors look at your team's experience and your startup's progress to gauge future potential Discounted Cash Flow (DCF) 📉 While DCF is more suitable for mature companies with stable cash flows, understanding it is valuable. It estimates future cash flows and discounts them to present value, providing insights into your business’s long-term potential Understanding these methods can help you set a realistic and attractive price for your business. 💪 Feel free to reach out if you want to brainstorm any of these topics further. I’m here to help you navigate your startup journey! 🚀 🔔Follow Karan Bagai, CFA, MBA for more insights! #BusinessValuation #StartupPricing #InvestorReadiness #EarlyStageStartups #BrisQBusiness #DutchStartups

An interesting and insightful read from Lenny Rachitsky as always. This is important for first-time founders who have a worthy problem to solve. It’s never a bad idea to understand what fits you early on #startup #techstartup #africastartups