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The perception of value sits at the center of any corporate transaction. The exchange of equity for cash must be balanced for a fair transaction to occur, and as a result there are a multitude of questions important to answer in advance of negotiations. Ultimately, valuation is the estimation of worth based on many factors including company management, capital structure, future earnings and asset value.
While entrepreneurs often consider the future potential of their companies, investors can view value based on milestones already achieved. Since investor returns lie squarely in the difference between the current and future values of their investment, these disparate views can often lead to difficult negotiation. Investors and entrepreneurs are well-served to identify a valuation that provides adequate compensation for the risk inherent in each transaction.
CANNABIS:The Heart of Valuation
Previously Published Oct 11, 2017 | Posted by Mazakali | Business | Investment