How Startup Valuation Works - Illustrated
How would you measure the value of a company? Especially, a company that you started a month ago – how do you determine startup valuation? That is the question you will be asking yourself when you look for money for your company. Create an infographic timeline like this on Adioma Let’s lay down the basics. Valuation is simply the value of a company. Why does startup valuation matter? Valuation matters to entrepreneurs because it determines the share of the company they have to give away to an investor in exchange for money. How do you calculate your valuation at the early stages? Figure out how much money you need to grow to a point where you will show significant growth and raise the next round of investment. How to Determine Valuation? Seed Stage Early-stage valuation is commonly described as “an art rather than a science,” which is not helpful. Traction. Reputation. Revenues. For consumer startups having a revenue might lower the valuation, even if temporarily. Hotness of industry.
• Venture valuation