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We often come across news that a startup has attained unicorn status, crossing the billion-dollar business valuation Or the richest person on earth has a net worth valued at 112 billion USD. However, this does not imply that the individual or the unicorn start-up possesses the stated amount in liquid assets.<br>
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Business Valuation - Is it just Another Statutory Obligation? We often come across news that a start-up has attained unicorn status, crossing the billion-dollar valuation. Or, the richest person on earth has a net worth valued at 112 billion USD. However, this does not imply that the individual or the unicorn start-up possesses the stated amount in liquid assets. It is merely the valuation done on the earning potential capabilities or the goodwill it has garnered in its respective industry, among other parameters. So, what makes a potential investor decide upon the amount of funds it is willing to infuse in a potential business? How do the two parties decipher upon the ownership stake or debentures that would be traded in exchange of the aforementioned funding? Well, the key towards attaining the optimal transaction value rests upon a comprehensive scrutiny of the business. This would entail a deep dive study of the organisation’s operations, present situation of the internal as well as external stakeholders and extrapolation of relevant data. Upon conducting the prevalent statutory tests, the valuer assists the transacting parties with the valuation reports of the respective entity. There are statutory requirements relating to the valuations which need to be conducted by a Registered Valuer or Merchant banker, depending upon the nature of the transaction. However, there is more than this that Business Valuation can offer.
You are aware of the present market forces. Indicators would provide relative ranking of the business. Helps in decision making in context with the projections and the means to attain the stated numbers. Helps you stay ahead of the learning curve and thereby keeping competition at bay. We, at Resurgent India are committed in our endeavour to assist your esteemed organisation with Business Valuation, Debt Syndication, Capital Financing, amongst other services. Do reach out to us at valuation@resurgentindia.com with your queries relating to the same.