Valuation of a Startup company

CFA Level I Equities
#1

Hello @ community,

I’m not sure if I post my question in the forum directory:

I’m currently studying for the CFA Level 1 exam in June and I’ve learnd ethics, quantitative methods and 50% of financial reporting so far.

A good friend of mine asked me for help. He started a start-up company half a year ago, and he needs advice about the valuation of his company for Investor relations.

Do you think that level 1 CFA learning material provides useful help in this topic?

Does it make sense to study Equity (and maybe alternative investments?) right away, so that I might be able to help him out in some days or weeks?

Appreciate your help on this.

Marcel

#2

Not sure about your prior experience/background etc. but do you really want to be giving your buddy advice that he is going to quote to his investors? What if you under-value his company and the investors buy a chunk of his equity on the cheap?

His company is still quite young, why does he not wait until after at least year before seeing what it’s worth?

#3

Everyone knows valuations of startups in this market are totally independent of any valid valuation method! (ie WhatsApp)

#4

This is a good paper:

http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf