The Importance of “Contextualisation” in Small and Medium-Sized Firms Valuation: Evidences from an Italian Case Study

Montani, Damiano; Perrini, Francesco; Gervasio, Daniele; Pulcini, Andrea

doi:10.5539/ijbm.v13n1p70

Cited by 3 publications

(1 citation statement)

References 57 publications

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“…First, it should be remembered that for any company valuation, it is essential to get adequate information (Sievers et al, 2013;Schmidlin, 2014) and to proceed to a correct contextualization of the business reality (Montani et al, 2018). As outlined by Black (2003), the company's value depends on two elements: current activities and development opportunities.…”

Section: Alternative Methods For Startup Valuation Discussed In the Amentioning

confidence: 99%

Startup Company Valuation: The State of Art and Future Trends

Montani¹,

Gervasio²,

Pulcini³

2020

IBR

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The aim of this conceptual article is to present a systematic literature review about the most used and innovative startup valuation methods to define the state of art and future trends on this important topic. Because of the particular features of early-stage companies, it is not easy to find an adequate method to assess their value. Traditional valuation methods are unsuitable for startups. Therefore, over time, academic literature and experienced investors created alternative and innovative valuation models. We analysed the main models, outlining the advantages and limits for each one. The results of our analysis show that there is currently no "perfect" method to assess a startup’s value. Each model discussed has significant limits, and the possibilities for improvement are many. We are witnessing a gradual withdrawal from more arbitrary valuation models, and consciousness is growing towards the idea that to better assess startup’s value, it is necessary to consider three aspects: attention to future forecasts instead of past data, using probability to consider different scenarios, and understanding of and attention to the specific business model of the startup rather than data on comparable companies in the market. Currently, none of the discussed methods integrates these three features harmoniously. We expect that in the near future, the academic literature will develop new valuation methods (or will perfect existing ones) that should consider the three characteristics mentioned previously. In this way, it would be possible to create a more suitable method to assess a startup's value, i.e., a method to reduce uncertainty and that better represents the startup’s value and makes startup company valuation more reliable.

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Section: Alternative Methods For Startup Valuation Discussed In the Amentioning

confidence: 99%

Startup Company Valuation: The State of Art and Future Trends

Montani¹,

Gervasio²,

Pulcini³

2020

IBR

Self Cite

View full text Add to dashboard Cite

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Start-up valuation: an overview of valuation approaches and the effect of a new capital infusion on an enterprise value of a start-up

Novák

2021

Ocenovani

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This article describes approaches and methods related to venture capital valuation namely, start-up valuation. New venture value concepts have emerged within venture transactions. The pre-money valuation shows the value of the start-up before new capital infusion, while the post-money valuation shows the value of the start-up including a new capital infusion. Approaches of venture capital valuation (VCV) are, in principle, coincident with approaches of public equity valuation. Four approaches of VCV can predict the start-up value in two directions of future expected earnings, the first directionpost-money value including a new capital infusion and the second directionpre-money value excluding capital investment/infusion. In the extreme scenario where a start-up without capital infusion ceases to exist because there are no venture capital providers, the expected profit will be zero, which means zero pre-money valuation. Ultimately, it is very difficult to determine whether the start-up value is before or after the new capital infusion and, thus, the start-up valuation becomes a matter of negotiation process between the founder and the venture investor as it depends on a new capital infusion, to what extent, it affects the enterprise value of a start-up or it has an impact on its future exit.

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Valuation Methodologies for Start-ups in Indonesia: A Bibliometric Analysis

Bramanti,

Xaviera,

Ninglasari

et al. 2024

KSS

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The start-up industry in Indonesia is receiving a lot of interest from businessmen, investors, and researchers. Reliable valuation techniques are essential for investors and business owners alike in Indonesia’s dynamic startup ecosystem. This study maps the structure of startup valuation research in the Indonesian setting using bibliometric analysis. It also examines how research subjects have changed over time and evaluates the significance of key studies. This study carefully examines the usual traits of new businesses in Indonesia, concentrating on both financial and non-financial factors. To illustrate the entire strategy adopted, start-up valuations frequently mix quantitative techniques like discounted cash flow (DCF) with qualitative assessments. There are still several calculating components that are not standardized when doing assessments at start-up. Therefore, valuation is more art than science. This bibliometric analysis delivers unique insights into research by syncing and visualizing knowledge networks, helping entrepreneurs, investors, and policy makers to comprehend the existing environment and future direction of startup assessment approaches in Indonesia. It uses co-word analysis to examine this topic’s knowledge structure. As a result, the research finds 163 journal articles related to start-up valuation. In addition, four clusters are found to describe the current state of start-up valuation: start-up, investment, venture capital and discounted cash flow. Keywords: start-ups, Indonesia, valuation, bibliomeric analysis

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The Importance of “Contextualisation” in Small and Medium-Sized Firms Valuation: Evidences from an Italian Case Study

Cited by 3 publications

References 57 publications

Startup Company Valuation: The State of Art and Future Trends

Startup Company Valuation: The State of Art and Future Trends

Start-up valuation: an overview of valuation approaches and the effect of a new capital infusion on an enterprise value of a start-up

Valuation Methodologies for Start-ups in Indonesia: A Bibliometric Analysis

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