Art based on experience
Valuing companies, scaleups, or startups for investors, is as much of an art, as it is a science. Risk factors reflect high levels of uncertainty; multiples are based on comparable transactions and applied models take exits into account. In addition, dilution through future rounds, availability of critical data of multiples, and many other needed parameters make venture valuations significantly more difficult than those of mature companies.
We are highly experienced in understanding technologies, business models and run company valuations following international private equity and venture valuation standards on a daily basis.
Using the right tools
Venionaire is a trusted partner for the valuation of mature companies, supporting M&A departments of large corporates, as well as venture funds, entrepreneurs, and business angels. We are specialized in heavy technology, high-growth companies and distinguish ourselves through our valuation approach between stages (pre-seed, seed, early-stage, venture, and late-stage venture capital) or events like buyouts, based on international standards (IPEV Guidelines).
Valuation estimation
The tricky part of startup valuation is always to find the right balance in terms and conditions. Hedge terms and typical venture capital terms – also called real options – will have a significant impact on the valuation or price of a transaction. One-time or rate payments, liquidation preferences (participating or non-participating), anti-dilution clauses, and vesting need to be considered carefully in any transaction for this matter.
We offer a full assessment on valuation and structuring of a potential deal (incl. solid investment opinion for supervisory boards or investment committees).
Valuation estimation
Venionaire recommends the dealmatrix.com startup valuation calculator, as we know how difficult it is to value early-stage companies, scaleups, or startups. Valuation is as much of an art, as it is a science. Risk factors reflect high levels of uncertainty; multiples are based on comparable transactions and applied models take exits into account. In addition, dilution through future rounds, availability of critical data of multiples, and many other needed parameters make venture valuations significantly more difficult than those of mature companies.
Important information
This STARTUP VALUATION CALCULATOR is provided by a third party (dealmatrix.com), by clicking above you will enter an external software provider.
Contact us to learn more and see if we are the right partners for your company valuation.
We have to differenciate between early- and later stage companies. While Pre-Seed companies sometimes do not even have a minimal viable product, their business case is an idea and likely to be changed quite frequently during the first 18 to 24 months. A first product market fit might be already tested by an early stage (growth) startup.
Numbers and financial plans will become truely interesting, when dealing with scaleups, where existing share-classes and terms usually also represent an increased complexity for a deal. We will need to apply the right valuation model, setting the right parameters and need to be transparant on our assumptions. We rely on data, which is very hard to get and collect in order generate fair valuations with any model we use.
There are valuation models, which Business Angels apply for early-stage startups and models which are more likely to be used from professional regulated investors, like venture capital funds.
Venionaire Capital developed a unique model for early- and later stage startups, called the Startup Rating Method. It takes individual strengths and weaknesses of startups into account and helps investors to get a price tag, for premiums or discounts they should fight for. Compared to other models, it is easy to adapt to diffent stages. The model does not rely purely financial or qualitative factors.
The most prominent method used by Business Angels is the “Payne Scorecard Method”, developed by Bill Payne. This simple top-down approach compares a startup to other typical startups at the same stage (investors benchmark the “standard” value of a pre-seed or early seed company in this case), within a geographic region and startup-sector (regtech, digital health, fintech, SaaS, etc.) – read more about the PAYNE SCORECARD METHOD.
Venture investors seeking a quick estimate of a valuation, with a small amount of inputs, will use a simple model called the VENTURE CAPITAL METHOD.
If you like to dive a little deeper we recommend the FIRST CHICAGO METHOD, as offers a smart approach that combines market-oriented and fundamental analytical methods.
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Venionaire Capital exclusively invests through the European Super Angels Club, for more information and application please go to the website. We do not accept direct investment proposals via this website.