Just came across a well written article in startup professionals blog by Marty Zwilling.   Below are a few bullets points for those looking for a scientific method to an overall artistic experience.

  1. Place a fair market value on all physical assets (asset approach)
  2. Assign real value to intellectual property. –
  3. All principals and employees add value.
  4. Early customers and contracts in progress add value.
  5. Discounted Cash Flow (DCF) on projections (income approach).
  6. Discretionary earnings multiple (earnings multiple approach).
  7. Calculate replacement cost for key assets (cost approach).
  8. Look at the size of the market, and the growth projections for your sector.
  9. Assess the number of direct competitors and barriers to entry.
  10. Find comparables who have received financing (market approach)

The full article can be found here

 

 

 

 

 

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