This week from the learnings I found that the P/E method was
quite fascinating. Taking the earnings expectations and calculating it out
versus calculating a direct method can make a better argument for the price of
your venture if you are going to sell or estimating the value itself. Some of
the calculating was a little confusing to me at first, but made sense after
reading over the terms several times. Two questions I would ask the author
would be: what do you foresee as the future for ventures…selling quick to
larger companies or holding out to make it as a small enterprise? Secondly, how
will the role of larger firms in the marketplace affect the valuation of new
start-ups when selling (i.e. Instagram being bought out by Facebook)? I really
do not feel there was anything I would disagree with this week’s readings.
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