How to value a startup?

Through the combined use of several valuation methods (usually 3), a weighted average will be obtained, allowing to estimate the final valuation. Each method will be adapted to the specificities of the sectors concerned in order to propose the most accurate valuation possible. The most commonly used methods are: profitability, patrimonial, comparative.

In the context of a startup, the most common method is the so-called DCF method since it allows to rely on estimates of future financial flows generated by the company, as the company has no history. 

Why value a startup?

One of the reasons for requesting a startup valuation is in the context of fundraising or a request for bank financing. When the original investors exit the startup, a valuation will also be requested. 

The strength of a XVAL valuation is the delivery of a detailed and documented report within 3 days, justifying the methods and assumptions used (EBITDA restatement, coefficient...) which will be the basis for discussions with the buyer, the banker.

You want to order a valuation of your startup, do not hesitate to contact one of our experts: contact a XVAL consultant.