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Valuation service - recommendations

pre-revenue tech co

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I have a tech client who is pre-revenue and needs a valuation for investment purposes. Does anyone have any recommendations?

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By Clinton Lee
28th Jul 2020 17:52

If there's no revenue, where is the value? Registered IP? Data? Other intangibles?

If the large majority of the value is in still-to-be-completed dev work, you've got a problem.

Was there a previous valuation you can use as a base, perhaps valuation at a previous fund raise?

Pre-revenue valuations are a load of nonsense anyway - just big works of fiction. Investors will come to completely independent views on value and these will vary widely from investor to investor.

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ALISK
By atleastisoundknowledgable...
29th Jul 2020 10:17

It'll be IP and a nearly completed app. No previous investment other than the founders at nominal.

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Replying to atleastisoundknowledgable...:
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By Wanderer
29th Jul 2020 10:57

So an incomplete app, with no user base and no track record of any revenue stream? Fairly easy to do a valuation then.

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Replying to Wanderer:
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By Mr_awol
29th Jul 2020 12:45

Not necessarily.

The existing product may have a value - either in terms of a cost to duplicate, or based upon (discounted) anticipated finished value less completion costs. The company may have a following/ready made market, and there will/may be a value to the opportunity.

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Replying to Mr_awol:
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By Wanderer
29th Jul 2020 12:58

Mr_awol wrote:

The existing product may have a value - either in terms of a cost to duplicate,

Mmm so the 'value' of a development product is what it costs to duplicate??? That's only one factor and often not the most important one.
Mr_awol wrote:
or based upon (discounted) anticipated finished value less completion costs.
Well finished value is what the question is all about isn't it?
Mr_awol wrote:
The company may have a following/ready made market, and there will/may be a value to the opportunity.

The company is pre-revenue.

Sorry but there are millions of apps out there. They only obtain a true value once they start having a regular, usually recurring user base, generating directly or indirectly a revenue stream..

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