Founder’s Pocket Guide: Startup Valuation

by Stephen R. Poland

This updated edition includes several new features, The Startup Valuation Explorer calculator Expanded coverage of Valuation Methods Responding to investor questions about your valuation Understanding option pool impact on your valuation For many early-stage entrepreneurs assigning a pre-money valuation to your startup is one of the more daunting tasks encountered during the fundraising quest. This guide provides a quick reference to all of the key topics around early-stage startup valuation and provides step-by-step examples for several valuation methods. In more detail, this Founder’s Pocket Guide helps startup founders What a startup valuation is and when you need to start worrying about it. Key terms and definitions associated with valuation, such as pre-money, post-money, and dilution. How investors view the valuation task, and what their expectations are for early-stage companies. How the valuation fits with your target raise amount and resulting founder equity ownership. How to do the simple math for calculating valuation percentages. How to estimate your company valuation using several accepted methods. What accounting valuation methods are and why they are not well suited for early-stage startups.

Genres: Business, Entrepreneurship, Startup, Finance, Reference

82 pages, Kindle Edition

First published August 16, 2014

Reviews

[Ahmed Abdelhamid · Rating 4 out of 5]

It delivers what is promised for 0-2Y old startups.
Very neat read, I would have fairly gave it 5 stars if the writer:
1. Spends few more pages for accounting valuations, and their tools.
Say 3 pages on DCF at least?

2. The VC method of valuation,
He misses adding that investors may also care about carry if they appoint a manager, hence also get reduced at this stage of valuation projections for exit value

Highly recommended book

[Leonardo Dopacio · Rating 4 out of 5]

Simple and easy to read and very useful for entrepreneurs

Many terms and concepts that I was not familiar previously, however everything was written simple to grasp.

Very useful being an entrepreneur. A first friendly approach to talk about startups valuation.

I recommend it.

[Jose Miguel Porto · Rating 3 out of 5]

Nice and easy to read high level overview on startup valuations. There are certain things that a practitioner (like me) sometimes takes from granted but when read o described by someone else in such a simple way (as in this book) provide a different perspective or brings more clarity to concepts. Enjoyed the book.

[Ian Fishwick · Rating 4 out of 5]

When new entrepreneurs are trying to raise money from new investors, how do they know how to value their business? Especially if it has little or no sales revenue. Stephen Poland explains simply some of the techniques you can use. It was only 80 pages on my iPad, so really quick to read and very useful.

[Thiago Marzagão · Rating 4 out of 5]

Short and sweet. The explanations and clear and to-the-point; no digressions, no fluff. Great starting point before jumping into more comprehensive valuation books. I just think the "angle" could be more balanced: Poland is clearly writing to startup founders and I wish he had given a bit more thought to the investor's perspective. Still worth it though.

[Paul DiGiammarino · Rating 5 out of 5]

Excellent 2 hour guide to understanding investors of start ups

Crisp and easily understood summary of how investors value and consider investing in early stage companies with concrete examples of valuation approaches.

[Augustus William · Rating 3 out of 5]

Very basic

This is a very basic guide aimed at someone with no financial background (much of the book spent covering extremely basic financial terminology, concepts and calculations).

[Brian · Rating 4 out of 5]

Good as a simple introduction to the topic for those who are new to the topic, and struggle with the maths (all equations are in extra big type!) Aimed at a basic level, it is inevitable incomplete, missing some alternative methods some details nuances.

[David · Rating 4 out of 5]

Technical terms made easier around the valuation methods

Technical terms made easier around the valuation methods, good book for a quick refresh or a first glance about valuation methods for startups.

[WM]

Finished in one day. Easily to read if you have read some books on investment. Anyway, it talks about all aspects about valuation. That will bring more confidence if you never negotiate a investment before.

[Gerald Carter · Rating 4 out of 5]

Good sum of information.

The format could be better, as you cannot zoom in on an iPad and the text was small.

Still worth the read.

[Rohit Grover · Rating 4 out of 5]

Not much useful at very early stage, but definitely at 2nd investment stage or series A probably

[Tangeni JI Amupadhi · Rating 4 out of 5]

Confidence builder

Surely a book to provide basic understanding of what to do with valuation. Will recommend it to non finance startup owners and managers.

[Jesse Kearney · Rating 5 out of 5]

This book is a nice reference book full of clear concise examples. It gives step by step instructions.

[Simon · Rating 4 out of 5]

Does what it needs to

It's concise and useful, a short yet comprehensive and useful quick reference for the experienced or starting point for the inexperienced.

[Asif · Rating 4 out of 5]

Good one for beginners

Short and easy to follow. It is a good book for beginners who have little idea about startup company valuation.

[raphael · Rating 4 out of 5]

Good book

[Gaurav Srivastava · Rating 5 out of 5]

Good book for beginners

[V Narayanan · Rating 4 out of 5]

The book did what it was intended to do
Well written
Simple

[Cazacu Radu · Rating 5 out of 5]

Very descriptive, informative and a lot of subject related info in a short book. Definitely recommend it for new startupers to understand where they are now with their business valuation