valuationI am not sure if this is the right place or not. If not, please kindly point me to the right direction :-)!
So initially let me tell you my story, I and 3 other members formed a team of freelancing jobs 4 years ago, we started doing small things and grow to do more bigger project (it is web development, mobile development project outsourcing) and eventually meet many people and clients and got to know some key people that are interested in doing some partnership and investment.
At this stage, there are many things that we are not sure about, so let me ask my question like this:
How do we calculate our team/company value? So that we know how much amount or shares we want to sell to the investors and got them to know our share price without saying like: I am selling you 20% of my shares of $20K but I do not know my share value.
Is it a good thing to start having investment at this stage? And how many percentage that initially we want to allocate for their investment and keep greater amount on the co-founders to make sure we are in control of the company.
I am sorry if I do not explain nicely, but you can correct me in any way so I could get your answer to take into more discussion and thinking!
Try speaking with an attorney that specializes in startup mergers and acquisitions. They will be able to give you guidance on the proper accounting steps to take (like having your books audited) and give you an idea of what other companies similar to yours have been valued at in the past.
In my opinion, without knowing the sector and sector target, calculating the company value is akin to calculating the length of a piece of string.
In utility and banking stocks, the purchases over earning ratio is important but in startups and high growth business there could be a very high valuation whilst the business is actually losing money.
My advise would be look to your peers and estimate a company valuation based on your peers, where investment will take you and where you want to be.
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