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Conclusion

Valuing startups is tricky but is important for both business owners and investors. Use multiple valuation methods to try to get the clearest idea of a startup’s value. You can then base your final valuation number on all of the factors you considered.

FAQ

Which startup valuation method is best?

There is no single best valuation method for startups. Each has pros and cons. It’s a good idea to use multiple methods to come up with a range.

How does Shark Tank calculate valuation?

Each investor on Shark Tank uses different methods for valuing companies. Entrepreneurs come with an idea of how much they want to raise and how much equity they wish to sell, such as $100,000 for 10%, which would result in a value of $1 million. The investors can agree with that valuation or offer another valuation.

How much equity should I give an investor?

It’s not unusual for startups to sell between 10% and 25% of their company’s equity during various funding stages.

About the Authors

TJ Porter

TJ Porter

Personal Finance Writer

I have in-depth experience in reviewing financial products such as savings accounts, credit cards, and brokerages, writing how-tos, and answering financial questions both simple and complicated.

More about me

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