Valuing young and innovative companies, commonly referred to as startups, presents various challenges due to their unique characteristics. This study delves into the complexity surrounding startup valuation by exploring numerous methods, challenges and implications associated with assessing the worth of these enterprises. Traditional valuation techniques, designed for mature and stable companies, often fall short in capturing the true value of startups, hence requiring the adoption of alternative methodologies. This research addresses the challenges posed by uncertainty, high interest rates and the impact of external factors on startup valuation. By providing a comprehensive overview of the startup ecosystem, the study aims to enhance understanding and inform decision-making within this complex environment. In addition, a case study is presented to assess the effectiveness of each valuation method in predicting the value of a prominent startup. Lastly, valuable insights into the process of valuing startups are gained, thereby assessing the challenges faced by investors and providing potential improvements to the process
Keywords
startupsvaluation methodstechnology-basedcase studySnowflake
Institute(s)
Erasmus University Rotterdam
Year
2023
Abstract
Author(s)
Pablo Gonzalez Hernandez