Equidam

JULY 23, 2025

Lack of Methodology or Standard: A vague clause (“valuations as determined by GP”) doesn’t specify how to determine value. Especially for early-stage startups, there are multiple methods one could use – cost basis, last round price, discounted cash flow, comparables, you name it. Choose your target return (ROI).

Discounted Cash Flow 64

Discounted Cash Flow Start-ups Marketability Comps 64

Valutico

MAY 6, 2024

Key takeaways: Valuation is critical in M&A for determining fair prices, negotiation, securing financing, and regulatory compliance. Market-based methods like Comparable Companies Analysis and Precedent Transactions Analysis offer relative measures of value based on market data.

Discounted Cash Flow 52

Discounted Cash Flow Precedent Transaction Analysis Weighted Average Cost of Capital Comparable Company Analysis 52

Equidam

APRIL 22, 2025

11] [13] Internal/Compliance (e.g., 409A, ESOP): Startups also encounter valuations for compliance purposes, most notably the 409A valuation in the US or similar valuations for Employee Stock Option Plans (ESOPs) elsewhere. [10] 11] [13] Internal/Compliance (e.g., Introduction to Discounted Cash Flow (DCF) Valuation.

Discounted Cash Flow 52

Discounted Cash Flow Marketability Risk Premium Start-ups 52

Equidam

APRIL 22, 2025

with Section 409A) require companies to establish the Fair Market Value (FMV) of their common stock through a formal valuation process. [6] It’s crucial for tax compliance and ensuring options have real economic value. a 409A valuation for tax compliance [14] ) cannot be directly substituted for another (e.g.,

Discounted Cash Flow 64

Discounted Cash Flow Terminal Value Marketability EBITDA 64