In his 8/8/08 BusinessWeek article Putting a Value on a New Venture: How to perform a back-of-the-envelope valuation of a business that’s still relatively unproven,Tom Taulli writes:
"Sure, there are generally accepted ways to determine what an established private company is worth (BusinessWeek SmallBiz, 4/16/08). But for a relatively unproven venture, the process is really more art than science (some may even think it’s magic or voodoo, or just plain craziness)."
When I shared insights I gained from creating a business plan for my new VT KnowledgeWorks company, I wrote, "Predicting revenues reminded me of frosting a fallen cake. One fills in the gap with icing, knowing it will still taste good, and hopes no one notices."
Taulli offers a link-rich, "premoney" and "post-money," comprehensive article on valuing a start-up company. His ways offer more weight than either magic or voodoo.
Probably not more weight than my icing.
I plan to learn new business recipes at Concept Camp.
Concept Camp is sponsored by Hodges, Jones & Mabry, P.C., a financial and accounting services firm. For more information on Concept Camp, contact VT KnowledgeWorks Member Services Manager Lindsey Eversole, [email protected].