Company Owners: How did you calculate your valuation?

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March 28, 2022

by a searcher from New York University - Leonard N. Stern School of Business in Maplewood, NJ, USA

Asking for a friend....when you thought about your company, it's growth potential, it's market growth, and your Revenue and EBITDA, what formulas or logic did you find most useful when creating a valuation? Many of the discussions here are buyer side so wondering what sellers are thinking. Thanks in advance!

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Reply by an investor
from IESE Business School in Paris, France
Best way is to discuss with relevant brokers (familiar with your company’s size and operating market), their knowledge of who may be out there looking for a similar company like yours or not will highly affect your valuation. All models have a strong limitation, SMEs is a non-liquid market IMO if you are below private equity deals target sizes.
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Reply by a searcher
from Texas Tech University in Houston, TX, USA
Hi Michael, check out the core value method. I have found it to be useful for SMEs and it is driven by key drivers. https://www.corevalueforadvisors.com/why-to-buy-business-consulting-system
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