Valuations explained

Comparables

Comparables

The market comparables method attempts to estimate a valuation based on the market capitalization of comparable listed companies. The market comparables method is a simple calculation using different key ratios like earning, sales, R&D investments, to estimate the value of a company.

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DCF

Discounted Cash Flow (DCF)

DCF calculations are used to estimate the value of potential investments. When DCF calculations produce values that are higher than the initial investment, this usually indicates that the investment may be worthwhile and should be considered.

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VC Method

VC Valuation

The venture capital method reflects the process of investors, where they are looking for an exit within 3 to 7 years. First an expected exit price for the investment is estimated. From there, one calculates back to the post-money valuation today taking into account the time and the risk the investors takes.

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CFME Model

CFME Model

Capitalization of earnings is a method of determining the value of an organization by calculating the net present value (NPV) of expected future profits or cash flows. The capitalization of earnings estimate is done by taking the entity's future earnings and dividing them by the capitalization rate (cap rate).

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