Startup Valuation

Business Plan Articles

Determining the valuation of a startup company can be a very challenging task. The business owner can often be overly optimistic relative to investors, which may attempt to derive the lowest valuation possible. Pro Business Plans applies the traditional Wall St. business valuation methodology, while adopting the latest startup valuation techniques that integrate performance metrics and qualitative factors such as the management team and external market. The company works closely with its clients to analyze all dimensions of a company, before delivering a formal opinion.

startup valuation

Startup Valuation Process

The startup valuation process has been a hotly debated topic due to its ambiguity and relatively subjective. Nonetheless, some private equity firms and academic professionals have attempted to establish a system to acquire some value of a startup company. While it is not necessarily universally accepted, and the valuation does vary considerably, these are points at which your company may use in order to justify its valuation.

Growth Stage Valuation

Growth stage startups are considered to be those that have at least one full year of operating history. The traditional valuation model is based upon three to five years of audited historical financials. Pro Business Plans applies the traditional valuation model using discounted cash flow (DCF) analysis and analyzing precedent sales of similar companies (COMPS), based upon their size and business model. It makes up for the lack of financial history by using startup metrics and analyzing the internal business model, any early stage goodwill, and the background of the management team. Therefore, it combines traditional Wall St. valuation methods with the latest approaches to determine the value of Silicon Valley growth stage companies.

  • You contact Pro Business Plans for a complementary consultation about your needs.
  • The team conferences with you to acquire the details required for the valuation models.
  • An analyst reviews your historical financials, performance metrics, and competitive advantage.
  • The same unbiased third-party research as top investment banks is used to justify assumptions.
  • A discounted cash flow and private comparable valuation model is completed based on assumptions.
  • You are presented with a comprehensive valuation report and a meeting is held to address questions.



Pre-Revenue Valuation

In many cases, it is more challenging to accurately determine the value of a pre-revenue startup than an established company. Because traditional company valuation models require historical financial statements to form assumptions, the typical process becomes invalid and all assumptions must be made based upon speculations about the future. Pro Business Plans attempts to close the gap between speculation and empirical assumptions by using non-financial startup performance metrics, reliable market research, and an in-depth analysis of the qualitative factors of a business. It then uses these dimensions to adjust the projections of similar companies that have been sold, or which reasonable assumptions about their financial performance may be formed in order to perform the traditional discounted cash flow valuation model.

  • You contact Pro Business Plans for a complementary consultation about your needs.
  • The team conferences with you to acquire the details required for the valuation models.
  • An analyst reviews your historical financials, performance metrics, and competitive advantage.
  • The same unbiased third-party research as top investment banks is used to justify assumptions.
  • A discounted cash flow and private comparable valuation model is completed based on assumptions.
  • You are presented with a comprehensive valuation report and a meeting is held to address questions.




Consulting Services

In addition to comprehensive business plan services, Pro Business Plans provides additional synergistic advisory services designed to help companies to improve their performance through the acquisition of capital and increase in revenue through business growth. The team at Pro Business Plans has prior experience working with high growth companies and as buy-side advisers for private equity funds. Unlike consulting firms, Pro Business Plans is a company that focuses on delivering tangible results that make a positive impact on the valuation of its clients.




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