Startup Valuations in contextLee W. Sargeant - CEO of L.W.S. Catalyst

As a follow-up to my article on "Start-up Valuations: Practical insights" (also see my Lindkedin Profile), I am always happy to add thoughts to a dynamic topic such as this. Firstly, I would like to emphasise the importance of documenting the "Company Mission-Vision-Strategy-Structure-Culture" fabric. Whether on the Website, or as a seperate video by the CEO, and or Executive Team. This essential message to stakeholders, employees, and followers is significant in that it demonstrates the leadership ability to manage all five elements simultaneously. I call this the "Leadership Agenda". It is very powerful, and in itself, a USP ! Secondly, it is extremely important, that the Financial Plan (3yr history + 3yr pro forma) shows an increasing revenue growth trend, and a projected revenue growth rate that entails, perhaps three growth scenarios for different levels of Investment. Seed1, Seed2, Seed3... With each scenario, the projection should specify what exactly the investments will be spent on, and what the ROI is. This need not be complicated; eg. need not entail "discounted cash flow projections" at some implicit interest rate. Keep it simple and straight forward: Direct Revenues from Direct Sales or Web based sales; Indirect / Partner Revenues as part of the Go-to-Market Strategy, that reflect projected Partner Sales. This way, Start-ups and Scale-ups have the opportunity to demonstrate how they prudently would spend the invested funds, correlating the investment levels to revenue growth. Lastly the Financial Plan, and the Investor Pitch should layout the go-to-market strategy, which in turn specifies target markets, go-to-market partners / strategic alliances, Direct Revenues from the Direct Sales Force (e.g. Account Managers) and Partner Sales Force (e.g. Partner Account Managers) if appropriate. That's it for now....as a Strategic Advisor, Board Member, and future Board Member, I am always happy to elaborate on this topic. I am passionate about this, because I love what I do as a Lecturer and Strategic Advisor to IT Start-ups and Scale-ups. Both entail "giving something back" to those who are motivated, have a clear vision and focus, and are equally as passionate as I am. What a pleasure ! More to come..