Start-Up Companies — Company Valuation

Valuation depends on when and how likely a projected outcome in the future is likely to occur. Therefore, the future value of an investment in terms of annualized rate of return or multiples of investment may not correspond to any hypothetical or real value of capital assets, "sweat equity," or intellectual capital (i.e, intellectual property and/or trade secrets).

Valuation is dependent on the stage of development of the innovation, the market for the product and/or service, the management team, and the likelihood of the "concern" to achieve the growth projected such that a liquidity event will meet the expectations of the investor. Standard financial valuation instruments are used when appropriate.

One indicator of that your valuation may be in the ball park is when an impartial person could sell the company for the price you think its worth.

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