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PARAMETERS UPDATE P5.2

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On June 3rd, 2019 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 November 1st, 2016. Whenever we were not able to find a significant amount of real pre-money valuations in a given country, we broadened our perspective the closest larger geographic entity (namely, continental region and continent). You can refer to the table at this link to see how they will change for your country specifically.

2 | Risk free rate used for the discount rate of the two DCF methods

The risk free rate have been updated to reflect the most recent market situation in terms of country risk and inflation. You will be able to see the updated parameter in your valuation reports.

General comments on the effect of the changes

On average, valuations will experience a slight increase, following the general trend of last quarter:

  • Valuations in seed phase rounds (angel, pre-seed, and seed) have increased worldwide , and the effect is captured in a general increase of average and maximum valuations.
  • Risk free rates have decreased for almost every country since beginning 2019, as investors have reduced their earlier country risk expectations. It follows that investing is perceived as less risky, so the valuations of the two DCF methods are modestly higher.

Please don’t hesitate to let us know in case you have any questions. Thanks for using Equidam!

The Equidam Team

Luca Trevisan
AUTHOR

Luca Trevisan

All stories by: Luca Trevisan

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