Questions

Besides Equity Firms and Venture Capitalists, are there any companies that do Pre-Revenue Valuations?

2answers

There are many consultants, brokers, appraisers and other experts who value businesses and cash flows. I do Most Probable Selling Price evaluations for my clients in most of the Western World.

The problem with a pre-revenue enterprise is that you'd be relying on projections.

Anyone who wants to buy a business is doing so because they wish to make money. This comes in one of two forms; cash flow from the subject business or savings because the subject business helps the acquirer save money.

Acquirers sometimes also consider synergies. For example: how much money could they make if they offered your product/service to their existing customer base.

The difficulty in the valuation process is deciding upon the reliability of the projections or trying to guess/estimate the savings or synergistic value to a potential acquirer who may not be known.

If you did want to hire a valuation specialist to create an opinion, it would likely have a stern warning to readers about the subjective nature of the input data.

Please arrange a call if you'd like to discuss your scenario and why you're looking for this type of expert.

David Barnett


Answered 6 years ago

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