Startup Valuation is Not a Science – It’s More like a Craft.

Headshot of Tony Oman

According to Tony Oman, director of business valuation services at Olsen Thielen, valuation is not a hard science – it’s more like a craft. Still, he had concrete wisdom to impart in the Startup Valuations 101 webinar, hosted by the University of Minnesota Venture Center, on March 28, during which he covered:

  • The three primary approaches to valuing a business: cost approach, market approach, and income approach.
  • The spectrum of startup valuation, from seed stage to later venture capital stage.
  • Key variables of startup valuations, including total addressable market, quality of product or technology, quality of management team, and scalable model.
  • Methods for early valuation such as the Berkus Method, a relatively easy process that doesn’t rely on historical financial information or projections, and the Venture Capital method, which is the most common method as it is broadly applicable across a startup’s lifecycle.
  • Methods for later stage valuation, including the First Chicago Method and the Discounted Cash Flow Method.

Oman, who has performed and reviewed hundreds of valuations and holds an MBA from Carlson School of Management, ended his presentation with observations about qualities that make a startup successful: a focus on customers above shareholders, a network of advisors, a focus on internal capabilities rather than competition, and a scalable operating model.

Compared to other Tech Comm webinars, this presentation had nearly twice the number of registrants and attendees. The recording is now available. Learn more about the Venture Center, the largest producer of high-tech startups in Minnesota.