0:52 - How NOT to do valuation
3:56 - Why do a company valuation
27:26 - Discounted cash flow
34:30 - How to influence your company value
37:49 - How often to do valuation
The first thing Jürg thinks founders should know is that value is in itself subjective, and guided by the individual who looks at the asset. What the UBS M&A valuation desk tries to do is identify a market consensus regarding the value of this asset.
Why should you do a company valuation? To prepare for the acquisition of your company, or for the buying of equity by other parties.
What should you take into consideration?
- Do not look to big company valuations as a reference, since your knowledge about their journey and inner workings is woefully incomplete.
- Mind the difference between the value potential of your company and its time value: you cannot just calculate the supposed value of your company taking into consideration the best case scenario of your company's future progress; you have to consider all sorts of possible scenarios, good and bad, and then base your valuation on that.
To prepare for a company valuation, you should first gather all knowledge about the future of your company in a transparent and easy-to-understand way.
"Large company valuations are often taken as a reference point by startups. This can go very wrong."