Entrepreneur

5 Tips to Getting an Accurate Valuation

There are some guidelines to consider that can steer you toward the right valuation number-and set you on the road to growth.
Source: Pixabay

When Brian Duerring decided last fall to pursue venture capital for StreamSpot, a Cincinnati-based start-up that provides automated streaming services to faith-based organizations, he needed to calculate a valuation for his business to effectively negotiate terms with potential investors.

“I knew there was going to be some sort of cap or ceiling, and I felt it would be smart to have that ammunition in my pocket for when that first term sheet came over,” he explains.

To arrive at a figure, Duerring employed various evaluation models, then incorporated the value he assigned to the company’s physical assets and intellectual property. During negotiations, he was pleased to find he did not get much pushback from investors, and StreamSpot, which was founded in 2011 and operates in 40 states and seven countries, closed its first round of seed financing in March.

“Calculating that valuation was helpful, because while

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