Valuation of an Early Stage Business

Mohammad Mustafa ()
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Mohammad Mustafa: Ex-CMD Small Industries Development Bank of India

Chapter Chapter 5 in Angel Investing, 2021, pp 137-164 from Springer

Abstract: Abstract The task of valuation of an early-stage business, without any reliable projections or financial history, can be complicated. In this chapter, we discuss the importance of valuation and explain how angel investors determine fair valuation of a new company. We look at some widely used valuation methodologies and their applicability in angel-investing scenario. Determining the right valuation is important as it can affect the overall returns for the angel. Fundraising path of companies is an important consideration during valuation negotiations. It helps angels evaluate the dilution of the stakes in the future, and then adjust their valuation expectations.

Keywords: Early-stage; Valuation; DCF; Venture capital method; Negotiation; Scorecard valuation (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-16-0921-3_5

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DOI: 10.1007/978-981-16-0921-3_5

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