Description
- Entrepreneurs want to value their companies as low as they can for stock option purposes, but as high as they can when they are attempting to raise capital. Analyze how often this statement may be true. Provide an example to support your response.
- Estimate the time and money needed to complete an early-stage evaluation on your business venture from Assignment 1. Then, indicate how the needs analysis may impact decisions made by the owner. Provide a rationale with your response.
Explanation & Answer
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Running head: VALUATION OF COMPANIES
Valuation of companies: Discussion 6 1
Name
Institution
1
VALUATION OF COMPANIES
2
A company’s valuation is an agreement that is usually between the entrepreneur and potential
investors. The valuation of companies has never been an easy nor straightforward task. Valuation
for new businesses that have not incurred any costs nor brought revenue is hard since such a
business has a lot of uncertainties compared to one that has been running for a certain duration.
Arguments have been running on the need for companies to value their companies as low as
possible for stock purposes and as high as they can with the aim of raising capital. Bakshi &
Chen, (2005) state that when raising capital for a startup company, entrepreneurs will a...
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