Valuation Across the Life Cycle

Although the inputs into valuation are the same for all businesses, the challenges we face in making the estimates can vary significantly across firms. In this section, we first break firms into four groups based on where they are in the life cycle. Then we explore the estimation issues we run into with firms in each stage.

The Business Life Cycle

Firms pass through a life cycle, starting as young idea companies, and working their way to high growth, maturity, and eventual decline. Because the difficulties associated with estimating valuation inputs vary as firms go through the life cycle, it is useful to start with the five phases that we divide the life cycle into and consider the challenges in each phase, ...

Get The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses, Second Edition now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.