Entrepreneur

5 Tips to Getting an Accurate Valuation

There are some guidelines to consider that can steer you toward the right valuation number-and set you on the road to growth.
Source: Pixabay

When Brian Duerring decided last fall to pursue venture capital for StreamSpot, a Cincinnati-based start-up that provides automated streaming services to faith-based organizations, he needed to calculate a valuation for his business to effectively negotiate terms with potential investors.

“I knew there was going to be some sort of cap or ceiling, and I felt it would be smart to have that ammunition in my pocket for when that first term sheet came over,” he explains.

To arrive at a figure, Duerring employed various evaluation models, then incorporated the value he assigned to the company’s physical assets and intellectual property. During negotiations, he was pleased to find he did not get much pushback from investors, and StreamSpot, which was founded in 2011 and operates in 40 states and seven countries, closed its first round of seed financing in March.

“Calculating that valuation was helpful, because while

You’re reading a preview, subscribe to read more.

More from Entrepreneur

Entrepreneur10 min read
Top Franchises for Diversity, Equity & Inclusion
A franchise is most successful when it reaches a wide variety of communities—and to do that best, it needs to bring a diversity of voices and experiences into its franchisee and corporate-level ranks. That’s why, for the third year, we’ve chosen the
Entrepreneur3 min read
Small Packaging Changes Can Have a Big Impact on Consumer Perception and Help You Meet Your Sustainability Goals
Sometimes even the smallest change can go a long way in improving consumer perception and brand loyalty. Right now, one of the most immediately impactful things a brand can do is to switch plastic packaging materials for paper. And for good reason. A
Entrepreneur12 min readCorporate Finance
Charities Are Getting Down to Business
Six years ago, Michelle Brown (pictured above) met with a major funder of her literacy nonprofit. She’d been counting on them to renew their grant, and there was no reason they shouldn’t. But as the meeting began, she had that sickening, slow-motion

Related Books & Audiobooks