[Algorithm update] QUALITATIVE VALUATION METHODS CRITERIA, FACTORS AND WEIGHTS

8 May 2018•2 Comments• Uncategorized
By Giulia Girardi

You can find below the changes to the criteria of the 2 qualitative valuation methods, Scorecard and Checklist, implemented on May 11th, 2018.
Rows highlighted in bold are criteria and their weights on the method. Each criteria is composed by the several factors listed below them.
On the left column there are the old criteria, factors and weights, while on the right you can find the updated ones.
You can read more on Equidam valuation methodology at this link.

Scorecard Method

Strength of the team | 30%
The years of industry experience of the managers Time commitment of the founders
The managerial and business skills achieved by the managers academically and professionally Number of employees
The technical skills and capabilities achieved by the managers academically and professionally Team spirit and comradeship
The level of managerial responsibility achieved in the past working experiences Years of industry experience of the core team
The team spirit and comradeship Business and managerial background of the core team
The size of the staff Technical skills of the core team
The time and economic commitment by the founders and any other member of the staff
Size the opportunity | 25%
The estimated potential size of the market (if provided) Estimated revenues in the third year according to the stage of the development
The estimated revenues in the third year according to the stage of the development (if provided) Estimated size of the market in three years
The geographical scope of the business Geographical scope of the business
The scalability of the business
Competitive environment | 10%
The analysis of the number of active market players Level of competition in the market
The quality of competitive products/services Quality of competitive products/services
The competitive advantage over competitive products/services Competitive advantage over other products/services
The threat of international competition (if any) Barriers to entry to the market
Threat of international competition
Stage of the Development of the Product/Service | 10%
Strength and protection of the product/service | 15%
Stage of the product/service roll-out Stage of the product/service roll-out
Intellectual Property | 5%
 Degree of loyalty of customers
The presence of IP Type of IP protection applicable
The type of IP protection applicable IP protection in place (if any)
The IP protection in place (if any)
Barriers to entry determined by IP-related aspects
Strategic Relations to Reach the Targeted Market | 10%
Strategic relationships with partners | 10%
The partnership with vendors and other selling channels Strenght of the relationships with key strategic partners
The partnership with strategic market agent to achieve the commercialization
Funding required | 10%
The capital need required according to stage of development. Later-stage businesses raising limited budgets are showing higher quality compared to similar companies seeking larger amounts. Capital required according to the stage of development

Checklist Method

Quality of the Management Team | 24%
Quality of the core team | 30%
The time commitment of the founders Time commitment of the founders
The managerial and business skills achieved by the managers academically and professionally Average age of the founders
The technical skills and capabilities achieved by the managers academically and professionally Presence in the team of serial, successful entrepreneurs
The level of managerial responsibility achieved in the past working experiences Team spirit and comradeship
The positive interaction of the previous features to the overall company success Years of industry experience of the core team
The team historical relationship (if any) Business and managerial background of the core team
The years of industry experience of the managers Technical skills of the core team
The average age of the founders: entrepreneurs of 35-45 are statically the most likely to succeed
The presence in the team of serial, successful entrepreneurs
Quality of the idea | 20%
Validation of the demand for the product/service Validation of the demand for the product/service
Level of competition in the market Level of competition in the market
Competitive advantage over other products/services Competitive advantage over other products/services
Geographical scope of the business Geographical scope of the business
Threat of international competition Threat of international competition
Feedback received by early adopters/industry experts Feedback received by early adopters/industry experts
Degree of loyalty of customers Degree of loyalty of customers
Product Roll-Out and IP Protection | 12%
Product Roll-Out and IP Protection | 15%
The presence of IP and the stage of the protections in place Stage of the product/service roll-out
The type of IP protection applicable Type of IP protection applicable
The positive interaction of the previous features to the overall company success  IP protection in place (if any)
The roll-out of the product/service
Strategic Relationships | 20%
Strategic Relationships | 15%
The presence of external investors among the shareholders Presence of an advisory board and number of advisors
The presence of the advisory board and their number Presence and type of current shareholders
The partnership with vendors and other selling channels Strength of the relationships with key strategic partners
The partnership with strategic market agents to achieve the commercialization Relationship with legal counselors
The partnership with legal counselors
Operating stage | 24%
Operating stage | 20%
The stage of development of the business: revenues/pre-revenues/profitable etc. Stage of develompent
Current profitability
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