In order to be eligible for a Net Tangible Asset (NTA) Book Valuation, companies must meet the following criteria
- your startup hasn't raised $10m in previous 12 months; and
- your startup is less than 7 years old or is a small business with less than $10m revenue; and
- your startup prepares financial reports.
If companies do not meet the eligibility criteria for an NTA Book Valuation, they can elect to use an alternate approved valuation method. Officially, this requires a written directors resolution as to the method used and the resultant value.
The alternate method has to be in writing and fully documented, taking into account the following on a reasonable basis:
(i) the value of tangible and intangible assets of the company;
(ii) the present value of anticipated future cash flows;
(iii) the market value of similar businesses, including the use of earnings multiples;
(iv) uplifts and discounts for control premiums, lack of marketability and key person risk
Our Startup Valuation considers these aspects.