Abstract

The aim of this study was to research and analyze the different methodologies used for the valuation process and identify which are the most suitable for startup companies in the Brazilian market. The investigation was carried out by means of bibliographical research articles through the databases Scopus and Web of Science and through interviews with professional experts in valuation of companies. The approach of the subject valuation for business startups, presents plenty of opportunities in the countries of Central and South America by their limited amount of scientific production found in databases of scientific productions. From the market point of view, the article presents important contribution to the promotion and maintenance of startups projects, many of which in the early stage of deployment, since it will serve as a source of consultation for such category of company that needs to identify the better options in the process of valuation for startups and companies as support for the economic and financial viability study of projects in the early stage, supporting the professional segments of Administration, Finance and Engineering Production, not limited only to those. The originality of this research is to make a direct relationship of valuation commonly used with startups definitions proposed by Blank and Dorf (2014) and Ries (2011).

Highlights

  • Entrepreneurship is growing in countries in North America, Europe and Brazil

  • The business growth of startups in Brazil and in other countries all over the world, accompany the growth, dissemination and democratization of the internet, causing it to boost new business across the globe, since the costs of deploying a business online or through an application are comparatively smaller when compared to a company that has all its scope of activities in the offline environment

  • Rogers (2011) argues that the growth of entrepreneurship will always be associated with the technological revolution that began in the United States in the early 1980s

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Summary

INTRODUCTION

Entrepreneurship is growing in countries in North America, Europe and Brazil. This is driven by the generation of the millenials, young people born between 1979 and 1995. Technological advances are responsible for the proliferation of new businesses in new areas, as the companies established on the Internet Young entrepreneurs realized they could enter their innovations, projects, and creative ideas through the internet, with little investment cost, or almost nothing, but with wide potential for future earnings, reports Lee (2014). This business model format won space next to traditional companies, creating a new form of company, the startups. Diagnosing the current framework of the valuation process of startup companies in the aforementioned market, one should identify the most used methodologies that feature what differentiates each one of them and one of the methods that best fits the reality of a startup company should be chosen

LITERATURE REVIEW
Financial Investment and Risk in investment in Startups
Valuation of Business Startups
Comparative Techniques of Market or Economic Result
Techniques Based on Financial Assets and Liabilities
Techniques Based on Discounted Cash Flow
Techniques based on value creation
Techniques based on options models
RESULTS AND DISCUSSIONS
CONCLUSION
1.17 Contribution of the companies evaluated: *
Findings
What is the average time expected payback for an investor in a start-up?
Full Text
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