Business Valuation: How Investors Determine the Value of Your Business
What is Business Valuation? Business valuation entails the methods of determining the economic value of a company. Before investors conduct a valuation of your firm, they will check its brand, markets, products and history. These items are then translated into monetary value. Business valuation provides important information to investors, creditors, owners and bankers. The results of business valuation vary according to the objectives and the process. Valuation is mostly an intrinsic process. It deals with the performance of a company rather than its pricing. Important Aspects of Valuation to Investor Investors perform a background check on a company before entering into its valuation. These aspects include: Pre-Money Valuation: It is the valuation of a company before the investment. Amount Invested: An investor will pay a certain price to realize a return or profit. Post-Money Valuation: The final valuation of a company after an investor pays a certain price. Amount invest...