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Ask HN: How to calculate value of my Startup?

4 pointsby zeynalovover 12 years ago
Recently I got an acquisition offer, but the amount looks very small to me. How should I estimate how much does it cost? I found some calculators but couldn't calculate it properly. So I give the details:<p>It's a small startup with 12 workers, 1 founder, bootstrapped. Started 11 month ago. Least Profitable Month: 7000$ Profit Most profitable month: 32.700$ Profit<p>With growth next year Potential monthly profit: 50 - 100.000$ Profit (my calculations)

4 comments

nicholas73over 12 years ago
Number one valuation factor is growth, and how much you can assure the growth. Ultimately the buyer is looking at future cash flow versus risk of getting there, plus some compounded discount based upon where else he could park his money and earn a return.<p>In simple terms, the value will be some multiple of profit. The best blue chip companies get about 10x plus dividend. You are not a secure bet so you might get 3x to as little as 1x. Plus someone might have to manage the business which eats into profit.<p>But, the best growth companies could get 20, 30, 50x+. So your job is to argue growth.<p>Ultimately however, you shouldn't calculate a value. The above should just determine a minimum. You need to figure out what your business is worth to the acquirer.
whichdanover 12 years ago
Can you define "workers"? How much are you paying them? What's the total monthly overhead? Can you reliably predict next year's revenue, or is it just a back-of-the-napkin estimate? Do you need to hire more "workers" as the site grows? How much work would it take for a company to replicate your current offering from scratch? How much are the assets (domain, website, etc) worth? Will the website remain profitable indefinitely or is it reliant on a current trend? How much time does the founder/owner need to spend monthly to run it?<p>You need to take a ton of factors into account before you can ask for any advice. You could also try your luck at listing it on Flippa.com or something similar.
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eduardordmover 12 years ago
You need to choose a target P/E and go with that, the problem with startups is the lack of a well defined trend in revenues.<p>That said, determine the earnings (if you can) and set a P/E of at least 30.<p>Let's say your earnings in 2012 were 1 million, 30 million sounds like a good price for the company, keep in mind that value is a measure of interest or the need for something.
imtu80over 12 years ago
Good will of your business should be your monthly gross * 24 (two years). I am curious to know what kind of startup you have.