What is the most common mathod of startup valuation?

Question

There are many ways to value a firm I.e. EBDITA multiple, DCF, sales multiple. But in all the above cases company requires revenue which is not there in a start-up company. Want to know opinion of people about valuation method of valueing a startup firm.

Answer 1

DCF is most common method of valuation of any firm, having said that the firm which does not have any revenue i.e. startup firm this method is not applicable like any other method.

Startups are valued based on the IP, founding team, strong business idea and most important is market traction. And again valuation here is always pinch of salt and depends on synergy it brings for the buyers. For Example YouTube was valued by the investor about $100m where Google paid $1.2b for the transaction.