Nigerian company CompexAfrica has launched a free online business valuation tool for startup owners looking to get an idea of how much equity they should be giving away in return for investment.
Disrupt Africa reported in August on the launch of CompexAfrica an online marketplace for the buying and selling of businesses that allows users to list their businesses and matches them with potential buyers using brokers and business advisory companies.
It has now launched a free business valuation tool after several months of development and testing, which clearly and concisely walks users through every step of the valuation process and enables them to work out a decent estimate within a few minutes.
The tool is designed to create an estimated market value for a company based upon a diverse set of attributes.
“It is important for business owners to have an idea about what their business could be worth while talking to a business broker or prospective buyer. The tool uses the Discounted Cash Flow (DCF) method by taking the expected future cash flows and “discounts” them back to the present day, to give a well-argued valuation,” said Ifeoma Uddoh, chief operating officer (COO) of CompexAfrica.
“Users should ensure they use actual financial data, and they should compare value given with other valuation methods.”