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Business valuation for raising capital
Regardless of whether you are raising equity capital (i.e. issuing shares to an investor) or debt capital (a loan from a bank or possibly a non-banking institution), a valuation is key to the process. For an issuance of shares when raising capital for business endeavors, which may include concepts like series A funding and series B funding rounds, a valuation of the business is critical. Without a valuation, the parties cannot agree on the number of shares to be issued and at what price.
A well-documented valuation, considering factors like financial performance, growth potential, and market conditions, instils confidence in potential investors. It enables entrepreneurs to present a compelling case and negotiate favorable terms. Although a bizval valuation is not designed for pre-revenue companies, we can work with businesses that have achieved revenue and have a path to profitability. This may not always be suitable for a series A funding round, but we can work with businesses that are scaling their operations in a series B or maturing into a sustainable operation in a series C funding round. In all these cases, a precise business valuation is the linchpin for successful fundraising, helping businesses raise funds for business growth and expansion.