Company Valuation
Jump to navigation
Jump to search
Company valuation basically includes the following steps:
- Investor looks at money to raise
- Investor looks at required rates of return given the investment stage:
- By looking at the required rate of return the investor calculates what he wants his money to be worth in year 'n'
- Then by looking at the projected value of the company from the business plan, the investor calculates what percentage of the shares he then would need.
- Then the share price can be calculated from the # shares and the original required investment.
Session audio:
Process explained in
spreadsheet (picture below:
Company valuation 'rules of thumb'
| Type of business | Formula |
|---|---|
| Retail | 3 times sales |
