Valuation methods for seed stage and pre-revenue startup companies: evidence from Brazil

• Ano de defesa: 2019
• Autor(a) principal: Wildt, Christian Felix
• Orientador(a): Behr, Patrick Gottfried
• Tipo de documento: Dissertação
• Tipo de acesso: Acesso aberto
• Idioma: eng
• Palavras-chave em Português: Tecnologia; Estágio de semente; Avaliação; Investimento inicial; Estágio inicial; Fluxo de caixa descontado; Soma do fator de risco; Empreendedorismo
• Palavras-chave em Inglês: Startup; Technology; Seed stage; Valuation; Startup investment; Early stage; Scorecard; Dscounted cash-flow; Risk factor summation; Entrepreneurship
• Link de acesso: https://hdl.handle.net/10438/27947

The purpose of this work is to analyse and to evaluate different startup valuation methods in the context of Brazilian technological seed-stage startups. This thesis analyses a scorecard, a risk factor summation and a discounted cashflow approach as representatives of different valuation methods. An analysis of the Brazilian entrepreneurial pillars and the semi-structured interviews with experts from the field was conducted to gather information for the modification of the different valuation approaches. Finally, these modified valuation approaches were tested when evaluating the Brazilian technological startup Whatsapp Automação. The research has shown that the pillars of entrepreneurship and the expert interviews indicate a relevance of the characteristics for the valuation of startups in Brazil. The analysis of the pillars of entrepreneurship revealed an insufficient inclusion of the complex regulatory framework in Brazil, the poor level of skilled labour in the country and the restricted access to finance for young entrepreneurs. The analysis of the expert interviews showed that factors like the motivation and passion of the entrepreneurs, the scalability of the business model and economic risks were insufficiently included in existing models. Applying these different modified valuation methods, the scorecard and the risk factor summation method demonstrated the best fit for the valuation process of a seed-stage startup. It has been shown, that personal characteristics of the founders are highly important for investors and need stronger inclusion. Also, entrepreneurs can benefit by knowing the investors main pain points in order to improve the structure of their startup before the first valuation.