Tuesday, August 30, 2016

How do Angel investors value a business with no revenues ?

There are 5 methods for establishing the pre-money valuation of pre-revenue companies, specifically:

  1. The Scorecard Method (Bill Payne) -most widely used: takes into account  6 to 7 factors  and assigns them a weighted factor based on the strength/weakness (+/-) percentage of norm: 

  • Strength of the Management Team                              0-30%
  • Size of the Opportunity                                                 0-25%
  • Product/Technology                                                      0-15%
  • Competitive Environment                                              0-10%
  • Marketing/Sales Channels/Partnerships                       0-10%
  • Need for Additional Investment                                     0 –5%
  • Other                                                                             0 –5%

    2.The Venture Capital Method -based on an exit price and exit timeline (let's assume 3 to 7 years), the current value is an NPV calculation.

    3. The Dave Berkus Method developed by Dr Dave Berkus of Tech Coast Angels.

    4. The Cayenne Valuation Calculator uses 25 questions answered convervatively to determine the progress of the venture

    5. The Risk Factor Summation Method

     For Biopharma industry visit   Dr. Aitana Peire and Dr. Patrik Frei have published an article “What is the value of a deal? in the biopharmadealmakers supplement June 2016 edition of nature biotechnology and Nature Reviews Drug Discovery.

Why Do Celebrities Invest in Start-ups and Venture Capital

It's the bang for the name buck. The greatest marketing is in a name. It's rocket-fueled product development. It develops traction. It's what led Kobe Bryant to team up with Jeff Stibel in a $100 MM TMT Venture Capital fund. " ...in fact, Kobe designed the company’s new logo with inspiration from piano keys."

1 comment:

  1. The two epic images at the end (no, it's not Kobe) are only visible if you are viewing the site under an encrypted connection (https://). Retype the URL with https:// ...(secured) connection in your browser, instead of http://...


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