CHAPTER 11
Valuing the Business
Everyone is interested in how much a business is worth. The entrepreneur and the entrepreneur’s family are interested because they hope to use some of the income from the business to live on or because they are interested in how much they might sell the business for someday. Then, there is a simple curiosity factor: “I wonder what I could get for this?” If the entrepreneur seeks outside funding from friends, banks, angels, and venture capitalists (VCs), they will be very interested in the potential value of the firm. When a public company is being sold, its current trading price establishes a starting point—usually a minimum transaction price—but the acquiring company must still decide on the maximum bid consistent ...
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