AlleyWatch has posted 10 Rules of Thumb for Startup Investment Valuation. The rules include:
- Place a fair market value on all physical assets
- Assign real value to intellectual property
- All principals and employees add value
- Early customers and contracts in progress add value
- Discounted Cash Flow (DCF) on projections
- Discretionary earnings multiple
- Calculate replacement cost for key assets
- Look at the size of the market and the growth projections for your sector
- Assess the number of direct competitors and barriers to entry
- Find “comparables” who have received financing