Calculating the Enterprise Value of public companies is a pretty simple math exercise. As I described in an earlier post, Cost of Financial Illiteracy: You can determine an approximate range of enterprise values with a bit of research and Internet data mining.

We will use an example to make this process real. Here is a four step process you can use:. You are looking for information about the total number of employees and estimated revenues. A simple Google search works just as well. So the next step would be to do a little surfing on Euromarket Designs, Inc. It was pretty easy to find this profile on Yahoo that shows that Euromarket Designs, Inc. You should cross check results with another site to see if the data is consistent.

This profile on Hoovers confirms the 6, employee figure. If you cannot find the company you are researching in the major business information portals like Hoovers or Yahoo you can use a specialized portal like Manta. Manta tracks information on 63 million small to medium sized business.

The Real 'Scandal' Over Zynga Stock Options Is Over Misleading Reporting | Techdirt

The second step in the process is to build a list of public companies that are in basically the same industry as the company you are targeting. You should come up with a list of at least three companies.

Public companies are highly preferable but you can make do with only two public companies and multiple private companies. Build Summary Metrics Matrix. The third step in the process is to build a summary spreadsheet of a few key financial and business metrics. Take a look at the following spreadsheet:. As the spreadsheet indicates there is a wide variation in valuation between the various companies. Develop Enterprise Value Estimates.

Take a look at the following table:. For the purposes of this analysis I excluded La-Z-Boy from the analysis. Calculating the Enterprise Value of private companies is not an easy task, but it is doable if you are willing to put in the time and energy to do some basic research. There are other factors aside from the simple multiple analysis you can use to adjust your estimates but this approach will at least get you into the ballpark.

If you need some help on a particularly vexing private company valuation research project drop me a note and I would be glad to give you some advice. Mail will not be published required.

You can use these tags: In challenging economic times like this many folk are tempted to break out of their personal economic straight jackets by launching a technology startup. Many newbie entrepreneurs look to venture capital as the best way to finance the launch and development of their business. One pof the key takeaways is that you should worry more about how much VCs will own at the end of the fund raising process and what your exit will look like versus how much equity you give away in your Seed or Series A round.

As the reality of sales forecasts settle in, enterprise software firms are beginning their annual hunt for new revenues. Interest in public company SaaS valuation trends continue to grow. This post presents an update on key valuation metrics for public SaaS companies as of January If you are a senior executive at a private equity backed portfolio company you need to understand how this tax change will impact your owners and their attitudes toward your business.

As noted in a recent Wall Street Journal article there are very different opinions about the tax law change. Whether the tax is fair or not is not the major issue for portfolio company executives. The real issue is that private equity owners could push for the sale of your business inat significantly reduced prices, to maximize their yield on the investment in your firm. Click through to read the whole post and take a look at the math and its implications for your business.

Manufacturing revenue is a harsh reality for most tech companies today.

Over the next few days we are going to be exploring a few techniques you could leverage at the start of to get you closer to hitting your revenue numbers. Click through to the full post to see the detail behind the numbers. In Mary and her team have been heavily promoting mobile Internet as the next big wave in the technology market. Click through to the full post to review the entire presentation or to download it from Morgan Stanley.

After having their first case dismissed, ZL has filed an amended complaint charging Gartner with defamation and trade libel. Given the high standard of proof in American libel litigation it is unlikely that ZL will fare any better this time around than they did the first time.

Perhaps ZL might consider the advice of Vivek Wadhwa, an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. In a recent TechCrunch article Vivek describes how he turned his developers into the best enterprise sales people in his market. See more details inside the post.

Supply Chain Management is not the most glamorous or valuable software market. According to the Software Equity Group Supply Chain Management ranks 19th out of the 24 software technology categories they track.

If boring old Supply Chain Management can generate this much activity then perhaps the rest of the tech market can look forward to a happy new year as well. Recently ZL Technologies Federal lawsuit against Gartner was dismissed by the Federal Court for the Northern District of California.

We also provide some advice from a noted industry expert on how companies like ZL can actually use marketing, sales, and branding to positively influence their relative MQ positioning. In late JDA attempted to acquire i2 by primarily funding the deal with new senior debt. Barely 11 months later, JDA and i2 have struck a new deal at a higher price, but with a radically different transaction structure that is engineered to ensure certainty of closure for the i2 shareholders.

Samsung Galaxy Note Pro Review - Tablets - Laptop Mag

This post explores the history of these two transactions and the creative structure that JDA is proposing. How does the market value SaaS companies in comparison to other software companies? Out of 25 different categories of software companies, pure play SaaS companies are the third most valuable category.

Not surprisingly, SaaS companies are faring well on exits as testing weak form efficiency for indian stock markets. In this post we will take a look at SaaS valuation and exit trends as well as some interesting trends that potentially foretell a significant slowdown in SaaS company revenue growth and valuations. This post explores the social media reputation repair community, including the infamous Dr.

We also forex harmonic ea what other well known brands Ivory Soap, Clorox, Preparation H, etc. On May 29th of this year ZL Technologies sued Gartner Inc. Everyone is looking for the looking for the next big wave to ride in the tech marketplace. While social media has exploded in the past year it has not created a wave ddfx the best forex trading system free download hyper-valuable new companies aside from Facebook, MySpace, Twitter, and Zynga.

Mary details her thinking in her Web 2. Thanks to some decent stats from the National Venture Capital Association and Thomson Reuters, the reality of the situation is pretty grim.

Most tech companies stand a better chance of winning the Lotto than getting a 10x return exit. This post takes a look at the numbers as well as examining how minority investments may be the best short term exit alternative for tech companies.

It was bound to happen sooner or later. Twitter is now being credited with playing an important role in two companies selling themselves.

This post reviews the recent sales of Tinkoff Restaurants zynga takes back stock options JobVent, both of which marketed themselves for sale via Twitter. Exit strategies for technology companies are like sex in high school — everyone talks about it but only a few are doing it right. The objective of this post is to layout a basic approach your company can use to achieve a successful exit.

There are three major components to an exit strategy: Both Facebook and Meetup achieved important milestones recently. Facebook became cash flow positive while Meetup actually had real profits. While such statements make good political theater it turns out that the reality of the situation is a bit different. Check out a detailed presentation from Venture on their analysis of angel investments that were analyzed using their new online platform. As part of the financial system regulatory redesign, venture capital firms will be required to register as investment advisers with the SEC.

Zynga to employees: Give back our stock or you'll be fired - CNET

This will impose a significantly higher compliance burden on VCs as well as requiring VCs to comply with anti-money laundering regulations imposed on financial institutions post This post presents a simple process to calculate the enterprise value of your private company.

The post also provides some guidance on how to find and leverage fairness opinions developed by investment bankers to support acquisitions or mergers amongst your competitors. They have the teams, financial resources, and connections to effectively leverage acquisitions to drive huge growth in their revenues and shareholder value. What about the rest of us? Many small to mid-sized tech companies, however, do not have a lot experience or expertise in mergers, acquisitions, divestitures, or exits.

As a result, they tend to shy away from using classic corporate development techniques to grow the value of their business or to achieve a significant exit. Over the next six weeks DevelopmentCorporate is going to publish an eleven part series that is designed to provide a basic introduction to corporate development techniques.

The topics include how to build an acquisition strategy, an exit strategy, how to analyze an acquisition candidate, and even how to pitch an acquisition to a board of directors, private equity firm, or VC.

This series begins with calculating the enterprise value of your firm. If your company is public, calculating enterprise value is a piece of cake — most stock quoting sites do it for you. If your firm is privately held you need to do a bit more leg work, but you can develop a reasonable estimate in less than an hour.

The balance of this post walks you through the steps in the calculation and where you can readily obtain information about comparable firms in your industry. In and there were lots of tech companies that had low valuations. Aggressive private equity firms entered the market and snapped up a lot of platform companies using primarily cash and limited debt. This post takes a look at three recent private equity deals: While these deals had a lot in common, there were unique and interesting aspects to all of them.

The post ends with a challenge as to how the private equity firms can leverage newly found free cash flow in these deals to build innovative solutions to drive true organic revenue growth in these properties to support prosperous IPO or acquisition exits three to five years from now.

It was certainly news to me. It looks like Zynga is one of the first companies aside from Facebook and MySpace that have successfully monetized the social media market place. The presentations do a good job of documenting the lack of presence Fortune CEOs have on Twitter, LinkedIn, Facebook and Wikipedia. The pitches then exhort those CEOs to take advantage of the opportunities they are missing. What the authors failed to understand is that there is practically no incremental benefit and a lot of downside for a Fortune CEO to engage in social media.

The opportunity costs are simply too great. Last Sunday Marc Andreessen and his long time partner Ben Horowitz launched a new venture capital firm aptly named Andreessen-Horowitz.

As part of the rollout both Marc and Ben did a number of media events. From those events we have assembled some interesting information — including the eight core principles of the new Andreessen-Horowitz firm, the role he and Ben plan on taking with the firm and their investments, as well as what they are specifically looking for in entrepreneurs and potential investments. How to Calculate the Enterprise Value of Private Companies.

Home About Us John C. How to Calculate the Enterprise Value of Private Companies March 7th, 2 Comments Posted in Financial LiteracyPrivate EquityProduct ManagementVenture Capital. How to Calculate Enterprise Value SaaS Valuation Update January Tech Private Equity is Like Again. Leave a Reply views, 54 so far today. SaaS Valuation Update January Interest in public company SaaS valuation trends continue to grow.

Supply Chain Management Exits Supply Chain Management is not the most glamorous or valuable software market. SaaS Company Valuation Trends How does the market value SaaS companies in comparison to other software companies?

Mary Meeker Internet Trends October Everyone is looking for the looking for the next big wave to ride in the tech marketplace. Will Twitter Dis-intermediate Investment Bankers?

How to Build an Exit Strategy Exit strategies for technology companies are like sex in high school — everyone talks about it but only a few are doing it right. Did Meetup Beat Facebook to Profitability? How Do Angel Investors Really Decide What to Invest In? Does Venture Capital Pose a Systemic Risk to the Financial System? Tim Geithner Thinks So. How to Calculate the Enterprise Value of Your Private Company This post presents a simple process to calculate the enterprise value of your private company.

Tech Private Equity is Like Again. About John Mecke John Mecke blogs on technology companies, mergers, acquisitions, divestitures, and strategic product management to achieve revenue and profit growth. He is currently the Managing Director of DevelopmentCorporate, an Atlanta-based corporate development consultancy. John has led over 15 major acquisitions and divestitures and consults regularly with various private equity and investment management firms.

Recent Post 10 Lies Angel Investors Tell How Much Equity Do VCs Really Get? Popular Post How to Calculate the Enterprise Value of Private Companies views Supply Chain Management Exits views How Much Are Mashable.

How to Calculate Enterprise Value views How Much Equity Do VCs Really Get? Updated Post John C.

Archives March February January December November October September August July June May April March February January December Tag Cloud acquisition deals ibanker ideas investment capital Links merger sourcing technology.

Most Popular How to Calculate the Enterprise Value of Private Companies views Supply Chain Management Exits views How Much Are Mashable. Popular Today How to Calculate the Enterprise Value of Private Companies 54 views Supply Chain Management Exits 27 views How to Calculate the Enterprise Value of Your Private Company 16 views SaaS Valuation Update January 8 views How to Build an Exit Strategy 5 views Cost of Financial Illiteracy: