In his usual cogent style, Aswath Damodaran (NYU Stern School of Business) expands on the recent valuations of Skype and LinkedIn to discuss the issues in valuing young growth companies. In his blog Musings on Markets he explains:
The value drivers for Skype - revenue growth, target pre-tax operating margin and survival - are generally the constants you worry about with young, growth companies. In the Little Book of Valuation, in the chapter on valuing young growth companies, I argue that these value drivers also should give you indicators of value plays in young, growth companies.Aswath suggests you take “your favorite young, growth company for a qualitative spin around this track and see if it passes the test” with the spreadsheet that he used for the valuation of Skype.
And…join valuation expert Mike Pellegrino (Pellegrino & Associates) for “Valuation of Early Stage Technologies: Tools, Methods & Case Examples,” a two-day intensive in which attendees will learn how to correctly assess IP value in early stage companies through case studies and hands-on examples.