The Art of Valuation

The Art of Valuation
21 Mar 2018 by Pieter Dorsman

 

Over the past few years I have been taking my ‘Deal Structuring and Term Sheets’ workshop all over Canada, and even a few times to the Caribbean. In the presentation there are a few slides on valuation and I usually spend around five to ten minutes talking about the subject. Attendees, be they investors or entrepreneurs or professionals that service the ecosystem, invariably get excited over valuation. It is an emotional subject for many and very often they lose sight over what founders and investors can achieve together if they do not get stuck on valuation.  There is an old joke that where the investors says to a founder “you can set your own valuation, as long as you will let me set all the other terms …” In other words, valuation is not nearly as important as some think it is.

Still, there are lots of questions around valuation. Between investors and founders the valuation debate often leads to difficult, protracted and totally unnecessary negotiations and conflict. The need to simplify and demystify this issue became very apparent over the years and I have thus put together a stand-alone workshop that focuses entirely on the issue of valuation. The goal is to get founders and investors over the hurdle quickly and do a deal so that a company can grow for the benefit of all.

In preparing for the workshop I did an inventory and found not less that 13 approaches to valuation for early stage technology companies. I am sure there are more. During the workshop I will discuss each of them in detail and combine them with some case studies. At the same time the workshop will look at the broader impact valuation has on a company, the relationship with its investors as well as the many plusses and minuses of high and low valuations. We also get to discuss how founders often get it wrong when determining how much money needs to be raised and which ultimately has an impact on determining the value of a company at the outset of a financing. An overview of the Canadian and US markets will give attendees a good handle once they go out and try and close deals.

Above all the goal is to ensure that investors and entrepreneurs get to work together and are able to map out a plan for the company that is served by the best possible financing structure. And that begins with setting the valuation such that there is no time wasted and that each party feels they have given up a bit, which is the general definition of a good compromise.

I hope you can join me, investors and founders on April 19, 2018 from 12-3 PM for an engaging workshop and conversation.

You can register here and save $50 with promocode vantec$50off 

 

Pieter