DCF in Startup Valuation
Question: Why would you use financial methods for the valuation of a startup company?
Answer: Because the public market uses it for valuations.
And more in depth, for these 2 reasons:
1| The public market has an effect on private valuations
With public market we mean companies traded on the various stock exchanges. They are usually large, but a small percentage of their shares is traded…
DCF Valuation for Startups
We already talked about projections, cash flows and relevant topics surrounding startup financial valuation. But how do you convert all these parameters to the future to calculate the value of the company today? One of the major methods to be used is called Discounted Cash Flow (DCF).
What is DCF?
To start, check out this tutorial from Investopedia to get a general idea of what DCF is.…
PARAMETERS UPDATE P6.0
On January 29, 2025, you’ll be upgraded to the latest version of Equidam with updated valuation parameters. This may result, on average, in a slight valuation increase.
What's changing
1 | Average valuations used in the Scorecard Method and maximum valuations used in the Checklist Method
We base our estimates on real transactions by country since September10th, 2022. Whenever we were not able…
[PARAMETERS UPDATE P6.0] EBITDA MULTIPLES
You can refer to the table below to see how the EBITDA multiples for the industries available on the Equidam platform will change on January 29th, 2025. These are applied to compute the Terminal value in the DCF method with Multiple and the potential exit value in the VC method.
The data is based on our analysis of more than 30,000 public companies as of the 31st of December 2024.…
$5 Billion and 150,000 Companies Later, What We’ve Learned
Twelve years ago, we set out to change the way startup valuation was approached. Since 2013, the Equidam platform has powered the valuations of more than 150,000 companies, primarily early-stage technology startups, who have raised a collective total of over $5 billion from investors (for context, that’s 1.6% of worldwide venture capital investment in 2023, or roughly the GDP of Fiji). During…
Fundraising
Valuation for high growth startups Valuation is a tool in your fundraising strategy.
Help potential investors understand the numbers that go alongside your pitch, reflecting your ambition and the implied valuation. GO TO VALUATION REPORT Valuation for high growth startups Valuation is a tool in your fundraising strategy.
Help potential investors understand the numbers…
[PARAMETERS UPDATE P5.8] EBITDA MULTIPLES
You can refer to the table below to see how the EBITDA multiples for the industries available on the Equidam platform will change on February 29th, 2024. These are applied to compute the Terminal value in the DCF method with Multiple and the potential exit value in the VC method.
The data is based on the early 2024 estimate, published annually by Prof. Aswath Damodaran of New York…
PARAMETERS UPDATE P5.8
On February 29th, 2024, you’ll be upgraded to the latest version of Equidam, with updated valuation parameters.
This update may result, on average, in a slight valuation decrease. To help explain why, we have provided more detailed analysis in the article below.
What's changing:
1. Average valuations used in the Scorecard Method and maximum valuations used in…
How to Calculate Startup Valuation: Step by Step
Valuing a startup can feel like plotting a course in the dark, as you try to reconcile significant uncertainty and risk with a clear-headed financial assessment. By understanding the purpose, drivers and methodology behind startup valuation, founders and investors can get much more value out of the process, and produce a result that encourages constructive fundraising negotiations and ensures…
Understanding Startup Valuation: Intuitions from real estate
Similar to startups, valuing residential real estate presents a particular set of challenges: each property is unique in terms of location, condition, design, and a host of other qualitative factors that influence its value. Market conditions can fluctuate widely, and a property's worth can be affected by both micro and macroeconomic factors that are often difficult to predict. Emotional and…