There are several ways to value a firm, and according to the method used the obtained result can differ. For companies that still are in an earlier stage of their activity, the valuing challenge can be even more complex due to the lack of information that these companies have available. With the massification of technologies, the creation of new businesses based on those innovative technologies is even more frequent in all main economies and so we are able to assist to the appearance of different companies considered as startups and that its funding it is within the reach of anyone: for these reason, the valuation of startups companies becomes an imperative necessity and the choice of the most appropriate method for their valuation reveals to be essential for investors. The study has been made within the internship in Fonte-Online, with the aim to access on of their projects. The main focus was on the bibliographic research of three different methods of valuation: Discount Cash Flow, Real Options and Relative Valuations. After analysing main differentiated factors of the business, this study proves its importance to find the best method to assign a market value. After the bibliographic research, the discount cash flow method has been considered has the suitable in terms of valuation and the relative valuation as a complementary method. Although a market value for the business was reached, it is hard to accept that value as correct, due to the uncertainty that this type of business has. Only the evolution of the company thru time will allow to find out if a possible investment was a correct one. This valuation should only be used has estimate of the potential success that company may lead and has in many cases, the final decisions should rely on the investor feelings of the future path.
Date of Award | 19 Feb 2018 |
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Original language | Portuguese |
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Awarding Institution | - Universidade Católica Portuguesa
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Supervisor | Luís Marques (Supervisor) & Miguel Soares (Co-Supervisor) |
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- Enterprise valuation
- Discounted cash flow valuation
- Real options valuation
- Relative valuation
- Startups
Avaliação de negócios em contexto de arranque: o caso: O Alfredo
Rosas, M. P. F. S. (Student). 19 Feb 2018
Student thesis: Master's Thesis