Prospectus’ team conducts enterprise valuation services for companies worldwide, spanning a plethora of industries and business models. Whether you a pre-revenue start-up seeking to disrupt a particular sector or industry, or you are an established enterprise that is seeking to raise capital in connection with a restructuring, expansion or strategic partnership, our team of finance specialists can provide an objective enterprise valuation for your enterprise and help determine a selling or offering price that can make dollars and sense. Our firm can also recommend and advise what you should offer investors in terms of equity ownership or even a sales price of the entire company.
To a a great extent, establishing a valuation for a company is a function of industry-standard calculation and mathematical equations that take into consideration the industry in which the company operates (allowing a ‘comparable analysis’ based on earnings), balance sheet, cash flow, operating margins, and to a certain degree, pipeline deals whose potential revenue has not yet been ‘booked’. However, we believe that an assortment of other factors that drive valuations for pre-revenue start-ups as well as a fast-growing enterprise are critical to forming a thesis for enterprise value. These factors can include pending legislation that will enhance the company’s opportunity set, innovative technology soon-to-be implemented that will transform the operations of a company, future market conditions (speculation) and very often, management team pedigree and culture can influence the perceived market value of a company. Regardless of what an owner believes or states what the company is worth, investors and strategic partners who view themselves as either sophisticated or opportunistic will inevitably find ways to calculate a lower valuation of your business, so as to ‘get a good deal’. The following factors should be considered in a company valuation including, but not limited to:
- The company’s products and services
- Scalability of products and services
- General market overview and future analysis
- Historical performance, with financials
- Pro forma and future looking projections
- Assets such as land, buildings, intellectual property
- Liabilities such as outstanding debt
- Management team
In addition to the above indicators, many will also look at similar companies in the space that have recently sold or are in the process of being sold, if the entire company is up for sale or just a part of it (like selling shares or units).
Enterprise Valuation Services: Start-ups vs. Established Companies
For any start-up, especially those in need of capital, one of the most challenging hurdles to overcome is valuing the company. A start-up company most likely doesn’t have historical financials. Essentially, this means the business owners cannot project mathematically what their future revenue will be as that is mostly determined by previous revenue and growth. It is important for start-ups to not exaggerate their valuation but to have a realistic approach to the value of their business by putting themselves in the investor’s shoes.
Our team at Prospectus can help value your company and determine the best enterprise valuation, whether in the course of establishing a framework for equity investors or if selling the company outright. We’ve been to “plenty of rodeos” in that our senior principals have been on both sides of the table in the course of many transactions. We ensure that our clients are protected from investors attempting to take advantage of those seeking funding, while also ensuring that investors trust the valuation. Whether you are selling your entire business or a piece or it, our team can ensure you value your products and services at an appropriate price.
Feel free to reach out to us for a free consultation.
- Prospectus Writing
- IPO Stock Exchange Listing
- Bond Offerings
- Feasibility Study
- Hedge Funds and Mutual Funds
- Offering Memorandum
- Private Placement Memorandum
- Offering Circular
- Explanatory Memorandum
- Information Memorandum
- Fund Setup Formation
- Securities Identifiers
- Registration and Filing
- Legal Work
- Escrow Services
- Business Plans