Venture Capital Unicorns are as Rare as Real Unicorns A unicorn is an imaginary horse-like creature with a large, pointed horn. Venture capital unicorns are companies still privately owned with valuations exceeding $1 billion. Valuation is based on share price during the latest fundraising round. Industry source CB Insights reports that there are now approximately […]
Raising a venture capital fund for your business relies on the right fundraising model. Learn how to plan, identify and execute your VC route to success.
If you want to buy (or sell) a business, you need to know what the business is worth. Once that is calculated, you need to find out how much the owner (or prospective buyer) thinks it is worth. If you can get those two numbers to line up — itself a discovery process, and an uncertain one at that — you’re going to need a way to finance the actual transaction…
There are at least two reasons why early valuations are often misleading. First, the early investor might be (a) investing for strategic or even charitable reasons, rather than primarily financial reasons, or (b) a sucker. In either case, the angel may agree to an inflated valuation to help the entrepreneur, or so they believe, get even bigger valuations in later rounds of equity financing.
Because of the portability of intangible assets, it is often the case that a business owner may find that a sale of those assets separate and apart from its tangible assets, working capital, and operating liabilities will generate a more positive outcome for both the buyer and the seller.
Your company’s online footprint often constitutes an important part of the overall value of its good will. Indeed, the ability to create an online experience for a brand and to use online channels to reach new customers serve existing ones is a part of the evolving nature of business in the 21st century. As a seller, you should understand the value of online assets.
As you start thinking about selling your business you should also think about how you might make some improvements to the business to maximize business value to a buyer. Identify the company’s shortfalls and consider fixing them. Look at your business through a prospective buyer’s eyes, and ask:
Most other business owners find themselves in the same situation. Generally, a business owner either does not have a plan for staging a company for transition, only has one in her head, or hasn’t communicated her plan to stakeholders.
Business valuation is both a science and an art. First, one has to understand the methods of valuation. Then, one has to understand that there are different ways to apply each method.
As an owner considers a sale of the business, it is critical to identify the goals of the transaction and match those objectives with the most suitable prospective buyer. There are many different kinds of buyers that might be well suited to acquire the business. Buyers are often grouped into two categories: “strategic buyers” and “financial buyers”.