

Ask HN: What do appraisers look for in a company without revenue? - askhn_throwaway

I've found myself in a situation where I need to leave my company for various reasons.  My shares have vested, but my partners are entitled to a buyout.  If we cannot decide on a number, an appraiser must be used.  What do appraisers look for when valuing a company without revenue?
======
jeffmould
I can't say for certain, but based on some classes I have taken regarding
financial management and accounting, I would assume items such as the
following would be looked at:

1\. Have you received any outside funding and at what valuation.

2\. What were and are the current shares valued at by the company.

3\. Expenses, burn rate.

4\. Cash in the bank.

5\. Intellectual property (are the patents, trademarks).

6\. Comparison with similar companies in the same market.

7\. How far away from achieving profitability or revenues are you? Is the
product still in development? What is holding up revenues?

8\. Overall general analysis of the company structure, books, etc... to
determine how strong the company is. Management background, etc...

The appraiser may take into account details the same way a VC or investor
would to determine a general valuation.

