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Startup valuation

Our Startup Valuations deliver business value estimates for new ventures, helping the founders understand what business stake to offer to potential investors in exchange for the required startup funding. This service can also be useful for early stage investors who need to evaluate targeted businesses.

To determine a startup business value, our business valuers use various valuation approaches and methods relevant for startups. These methods may include:

  • Discounted Cash Flow (DCF) method – an income-based valuation method which estimates the business value based on the projected cash flows. The business value is determined by discounting the future cash flows for time and risk using an appropriate discount rate. DCF method is highly reliant on projections and assumptions, thus its application can result in an inaccurate value estimate. This is why we generally test the DCF outcome against other valuation methods, such as Cost to Create and Rule of Thumb.
  • Cost to Create method is an asset-based method which estimates the business value based on how much it would cost to build a similar business (a business producing similar economic benefits) from scratch.
  • Rule of Thumb methods focus on non-financial aspects of a startup to estimate the business value. In startup valuations, assessing non-financial aspects, such as the startup potential, risk profile and progress of the commercialization activities, is particularly important. This is because financial data traditionally used for valuing established businesses is either non-existent for startups (no historical financials accumulated yet) or unverifiable (financial projections startups produce are prone to over- and under-estimations and bias).

What is included in our Startup Valuation reports?

Our standard Startup Valuation reports include the following:

  • Executive summary
  • Description, nature and scope of the business valuation assignment
  • Industry overview
  • Business/concept overview
  • Financial Plan with projections for five years, including: Summary of start-up costs & funding requirements, Sales and Cash Flow projections by month, and annual Profit and Loss account projections
  • Valuation context
  • Valuation assessment
  • Conclusion of value

How much does our Startup Valuation cost?

Our full-scope Startup Valuation service costs from $2,985 incl. GST. Please contact us to obtain a quote.

How does it work? How long does it take?

  1. Call us on 02 8072 8929 or email us at julia@professionalbusinessvaluers.com.au. We offer valuation services across Australia, including Sydney, Melbourne, Brisbane, Gold Coast, Sunshine Coast, Cairns, Darwin, Perth, Adelaide and Hobart.
  2. Fill in our Startup Valuation questionnaire (we provide it after the initial communication).
  3. We will then contact you for more information, if required, advise the available dates to start on your service, and send you the engagement letter and the invoice.
  4. It will take us from seven business days to prepare a valuation report draft after the required additional information is provided and the payment is received. We will send you the draft for review and comments.
  5. After your comments are provided, we will take from two business days to finalise your Startup Valuation report.