Navigating the complex realm of business valuation is a challenging task. Especially for startups with limited historical data to base your valuation on. We offer workshops every year to help startups understand how valuation works, how to best prepare for negotiations, and how to set terms between you and the investor. We look back at the workshop held on 28 September: Company Valuation & Legal Issues of Joint Ventures with Investors and discuss why valuation is so important for startups and what terms are essential.
Whatever stage your company is at, valuation is a pre-condition for external financing and, thus, for moving forward. John van Zandbergen, CEO of Ourobionics, explains the importance of investors: “We are using deep technology to enable human tissues and organs to become cyborganic, transforming regenerative medicine. Since our founding in 2021, we have been through a number of valuation processes. We find that the value investors place on your startup is very different. There are many different valuation models, and I would like to know on what basis such a valuation is done.”
The CEO of Exolumen adds: “We have developed a product to project anatomy onto the human body in order to reduce complications during surgery. It is a promising product, but it’s difficult to determine the value of our startup. For investors, this is business as usual, but for startups it is new. So any information I can get on the subject is interesting. For example, how can you get an indication of your company’s value? Google helps, of course, but in a workshop, you learn a lot more from speakers from the field.”
Sharing their knowledge
There were three speakers at the workshop to delve into the topic of ‘Company valuation & legal issues of joint ventures with investors’. Bram ten Bok of Oost NL, Sjoerd Klabbers of BDO and Emile Sahhar of Poelmann van den Broek Lawyers.
Ten Bok was the first speaker. As Investment Manager Health at Oost NL, he talked about the valuation process from an investor’s perspective. “Both investors and entrepreneurs want a deal that makes them happy,” explains Ten Bok. “In order to have fruitful discussions about company valuation, it’s important for both sides to have a good understanding of each other’s perspective. I am here today to answer questions such as: ‘What does an investor look for in a business case?’ and ‘What is expected of you as an entrepreneur?’”
“Naturally, an investor wants a good return on his investment. This is often difficult for startups in the health and high-tech sector because a lot of upfront investment is needed before your product can reach the market. This is why investors need to get a good feel for the startup and its growth potential.”
Next up is Klabbers from BDO. “As a consultant at BDO, I deal with company valuations and buy-and-sell on a daily basis. Startups are the new engine of the economy, so I think it’s important to be here today. This way, I can help our region by explaining exactly how such a valuation is done, what methods are available and what pitfalls startups may encounter.”
Finally, Sahhar takes the microphone. “As a lawyer and salary partner at Poelman van den Broek, I deal with mergers, acquisitions and related legislation on a daily basis. I like to help founders by sharing my knowledge. For example, what can go wrong between an entrepreneur and an investor in a company? Thorough consideration of these issues will help ensure a smooth relationship between the entrepreneur and the investor.”
Positive reactions
After the workshop, the startups gained some useful insights into the valuation world. This leads to enthusiastic reactions, for example from Exolumen’s CEO: “It was very positive for me. There was a lot of room for interaction and questions. It is a very technical subject, but it was explained in a way everyone could understand. It was interesting to hear how investors think and what is important to them. Sometimes you forget that you have to think from their point of view as well, to be more in tune with what is important to them. That helped me a lot. These are points that I will think about when I’ll have a conversation with a potential investor. All in all, the workshop made a very positive contribution!”
Check out our event calender to see when the next workshop ‘Company valuation & legal issues of joint ventures with investors’ is planned!
