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Topic : Startup Guide for Entrepreneurs
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Startup World

 
Started by : Veena Gupta, Analyst, Blackstone Group   09 05 2009 10:39:11 +0000
Industry : Management & Strategy ConsultingFunctional Area : Getting Started(Entrepreneurship)
Activity:  33 views;  last activity : 07 06 2010 20:18:09 +0000

Investors  are always eager about the money that they have invested in a business. Investors would like to know up to what extend their investment will grow.  It becomes an absolute requisite when the entrepreneur wants to raise private or public capital  from investors. Investors are investing because they want to earn.

 

So, is their any way to value the startups?

 
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1 MARKET AND FUTURE BASE METHODS
2 Big lead on competitors

MARKET AND FUTURE BASE METHODS

idea posted by Veena Gupta Analyst, Blackstone Group

In my view, by market approach method  and Income based method we can value start-ups. In market approach valuation process involves finding other companies,that are at a similar stage of development and that focus on existing or proposed products similar to those of the company being valued. By Income based method  value is derived from profits that the new company is expected to generate.That is a company  that does not take steps to control expenses will not show bright future.

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Big lead on competitors

idea posted by sumitra dutta Consultant, XYZ


 For start-ups also competitors  forces detemine valuation. If you can show a big lead on competitors, you should claim the “first mover” advantage. That is the  Goodwill can easily account for a couple of million in valuation.

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