Representing valuation in LivePlan Follow

We're sometimes asked if LivePlan can help calculate the valuation of a company. This is outside the scope of the app, because valuation involves many variables, and is very different for start-ups vs. existing businesses. In addition, no matter what method you might use to estimate a future valuation for your company, investors will make their own conclusions based on their experiences.

For a real-world explanation of why valuation calculations can be tricky, read our founder Tim Berry's article, Looking for Investment? Understand Startup Valuation.

 

With that said, however, we do have some free calculators on our website Bplans.com that can help you with exploring valuation.

Note: Both of the tools below will calculate Net Present Value (NPV) and Internal Rate of Return (IRR) as well as the estimates mentioned below.

 

Discounted Cash Flow calculator

Discounted cash flow is a method that helps investors estimate how favorable an investment opportunity might be. The analysis is based on a concept known as "the time value of money," which means that essentially, a dollar today is worth more than a dollar tomorrow. Bplans offers a free online calculator that helps you explore the time value of a potential investment:

To add the results of this calculator to your plan in LivePlan, you can either create a custom text topic and include the numbers there, or take a screen shot of the results and import them into your plan as an image.

 

Investment Offering calculator

This online calculator gives you a way to see an investment from both sides - yours, and the investor's. With this tool, you can explore variations on investment amounts and equity share, to arrive at the amount of equity you're turning over, and what the final return would be for the investor.

To add the results of this calculator to your plan in LivePlan, you can either create a custom text topic and include the numbers there, or take a screen shot of the results and import them into your plan as an image.

 

Further reading about valuation

Here are some more helpful articles from Tim Berry, who has worked with valuations as both a business owner and an angel investor:

 

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