Valuation · Business

What are the main factors that are considered to determine the valuation of cloud startups?

Shamim Hasan CEO at Xpart Solutions

October 8th, 2016

Please mention the factors and industry standards to determine valuation of a startup in a cloud business.

Arthur Lipper Chairman of British Far East Holdings Ltd.

October 9th, 2016

Assuming the ability to produce an end-product, the scope of the early demand for the product or service.

Gary Hare Consultant - B2B eCommerce, Spend Management

October 13th, 2016

Comps (comparisons). Take valuation and annual / trailing sales of public and private companies in your market segment. Calculate the price to sales ratio (valuation divided by annual / trailing sales) for each company. If there are recent private company exits, or private equity buyouts in your segment, note the price to sales ratios at the time of the transaction. Average the ratios, and apply to your own sales numbers, and you have a valuation. Of course, this is not a perfect approach, but at least its based on data, versus subjective opinions.