Michael S. Blake, CFA, ASA, ABAR, BCA, Founder of Arpeggio Advisors

5-Step Methodology to Improve Startup Valuations and Empower the Negotiation Process 

Determining the value of startup companies in a rational way is inherently tricky.  The company may have no operating history, no financial metrics of significance, and may not even have a product to sell.  The company could even be months or years away from reaching that point.  Startup companies are generally financially distressed at birth – they are statistically more likely to fail than continue to exist after 2 years.  The result is strange, semi-engaged negotiations that is akin to two people with blurred vision trying to navigate a dimly lit room with floor obstacles in the way.  It is very hard to negotiate effectively when you don’t have a handle on what a rational number would look like in the first place.