Business Valuation: Methods and Frameworks
Determining what a business is worth is a mix of art and science. Buyers and sellers rely on different valuation frameworks depending on company size, industry, and growth rates. Small businesses are typically valued using a multiple of Seller's Discretionary Earnings (SDE), while larger companies use Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). High-growth tech companies often warrant a Discounted Cash Flow (DCF) model that projects future cash flows and discounts them to present value.
Using a business valuation calculator provides a blended estimate of your company's worth. This tool helps founders evaluate acquisition offers and prepare for funding rounds. Comparing these values with the startup equity dilution simulator and the capital expenditure ROI calculator ensures you understand how capital changes affect your company's exit valuation.