Maladjustment’s about it with meth businesses venture-backed startups that want to become big one day you’ll see some greater discount and adjustments the rebut in general since the end goal is to become a large business you won’t see dramatic difference is quite as much you will see a lot more differences with money businesses true small businesses because you have to discount.
The cops multiple significantly you have a discount terminal value or look at it or calculate it in a different way and so on and so forth there aren’t really new methodologies or multiples with private companies they’re just variations and tweaks of old ones the basic point is that private companies are generally worth less than public companies of the same size simply because they are riskier they’re less liquid and so your returns expectations have to be higher as well on the accounting.
side you often tweak and we classify the statements especially for small businesses and then on the evaluation DC side you will often applicability discounts you have to make rough estimates for the discount rate and you may have to discount terminal value skip it entirely or come up with some other method of calculating it so that’s it for our tutorial on private company valuation I hope you understand this topic more and can now answer some of your own questions whenever a question related to private companies comes.
upon this video we’re going to talk about how to value a firm using multiples so previously we talked about the dividend discount model and how we can view the firm as a stream of dividends that we can discount back to the present we also talked about the total payout model where we see we’re going to focus on dividends and share repurchases all distributions to equity holders and thence.
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