Learn how the Start Fund allows you to launch a real VC fund instantly with no up front costs.
RSVP for May 29th
Previous Post
Next Post
2

Asked by

Community Member

on

in

Accounting & Taxes

Is a DCF (Discounted Cash Flows) method generally being used to calculate a startup valuation?

Since DCF method uses historical data to predict future cash flows of the company, this usually does not fit a startup since we have very little to no data on the cashflows. It is better to look for some benchmarks to tell valuation of a startup since it shows how others priced the companies in a given market/ geography/ setup. 
1 See in Base
3

Answered by

Mike Suprovici

on

Startup valuations are typically set by the market of investors. If there is a high investor demand, the valuation of the startup is typically higher. If there is low investor demand, the valuation of the startup is lower. If there is no investor demand, the startup will not secure financing. 

Join the Leaders of Venture 2.0

Our graduates are creating disruptive capital with exceptional expertise, ethical investing practices, and exceptional returns. Whether you're launching your first fund or scaling an established firm, VC Lab provides the tools, network, and support needed to succeed in today's venture landscape.

Apply Now
How do I start raising my first venture fund? What are the key considerations for becoming a Limited Partner?
How can I improve my emerging manager firm's deal flow? What strategies help attract institutional LPs?
How do I build a compelling investment thesis? What are best practices for portfolio management?
How can I differentiate my VC firm in a crowded market? What are the typical fund terms for emerging managers?