How do you prepare your Startup Valuation?

Startup Valuations can be used independently to support capital raising negotiations by founders and angels.  It can also be adopted for use by startups that are implementing an Employee Share Scheme (ESS) that doesn’t meet the criteria for a Net Tangible Asset valuation. 

We will need from you:

  • Confirmed date of valuation
  • Balance Sheet and P&L as at the valuation date, or invite us into your Xero file
  • an ASIC register or equivalent to confirm the number of shares on issue at the date of valuation
  • business background and overview in the form of a business plan, offer document or pitch deck
  • Purpose of valuation
  • business background and a completed detailed qualitative questionnaire which we will send you
  • 3-5 year forecast / financial model through to showing revenues
  • Growth rates

Financial Model Review

We will first review and provide feedback on your existing financial model for:

  1. Coherence: Do the single assumptions make sense, individually? For example, is this acquisition cost reasonable for this industry and business?
  2. Consistency: The individual assumptions should not contradict each other. For example, if you forecast to close 100 deals per month, you should make sure that you account for the personnel cost necessary to reach that goal
  3. Completeness: Are you not considering something? For example, did you estimate the cash flows of your business in the next 3 years
  4. Logic: Once all the previous parameters are there, it's good to double-check if they make sense as a whole. For example, does this acquisition strategy/product line actually work in reality?

We will, independently, provide you our financial model review so that there is an opportunity for your model to be updated, if required, prior to proceeding with the valuation.

Preparing the Valuation

With a signed off off financial model, we will provide a detailed qualitative questionnaire, and request other supporting information to allow us to:

  1. access one of the most complete startup and private company database of comparables in the world with over 30 million data points across 88 countries
  2. prepare an independent 16-page 5-valuation method report including detailed business information, financial projections, valuations incl parameters, and supporting explanations. See the Sample Startup Valuation Report for an example.
  3. discuss before/during/after preparation of your valuation report
  4. rework of the valuation report within 1 month (up to 2 further iterations)