Analysing the Possibility to Apply Business Valuation Methods to Start-ups

Abstract

The paper analyses traditional business valuation methods and the possibility to apply them to startups, the currently fashionable innovative companies. Using their own experience from working with the local start-up environment and with seed capital investment, the authors conclude that the valuation of business ventures poses a serious challenge to investors, as well as to start-up founders. Being the first in a wider series of publications, the paper focuses on the analysis of five business valuation methods known at theoretical and practical levels in the context of their applicability to the valuation of start-ups. This publication highlights the advantages and drawbacks of business valuation methods and delineates the dilemmas faced by investors and start-up founders.