SEBI’s tricky search for startup valuation

UPSC Practice recommends SEBI’s tricky search for startup valuation.

Since they do not have much of a history, valuation of startups has to necessarily rely on the future. And since they operate in relatively uncharted terrain, they face a unique set of risks that could alter the very nature of their business. Yet, popular forms of valuation exist with methodologies falling into broad categories of stage development, cost-to-duplicate, future valuation, market multiple, risk factor summation and discounted cash flow. Venture capitalists have their preferences, which can involve a combination of approaches.

Courtesy: ET Editorial-Opinion-Economic Times

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