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Valuation is based on the financial forecast of a business. One person’s forecast scenario for the start-up may vary from another’s view of the future for the very same start-up. The assumptions Kumar makes may be different from what Sheena may believe in. Hence standardisation is not possible. However, in terms of the process followed, there are a few steps that are standard, such as financial forecasting, valuation calculation based on current market multiples and some standard methods such as discounted cash flow etc. This is followed by negotiation and if all goes well, by deal closure.
As an Entrepreneur:
FIRST
Set out why you want to value: Is it for one or combination of the following reasons?
NEXT
Understand the underlying factors in each of the above, which could impact and/or drive the valuation:
MOST RELEVANT
CALLING OUT
This question was sent to us by Lakshmi, Founder, Dekko Digital