Forums: Discussions for entrepreneurs and small business.

Hi everyone!

I am the majority owner of an online education start-up that is focuses on providing study materials (books, vieos, practice tests) for a very well-known financial certification/designation. The company is doing very well- excellent product reviews and we should be profitable this year (it is our first year of commercial operations).

I am wondering whether I should sell a stake in the company to some VC that can help us take the next step forward. We could use the money to advertise more aggresively and acelerate our product release schedule.

Who do i turn to for advice? Can someone tell me what valuation multiples are primarily used in the industry? Are there some 'agent' companies that I can talk to who can value the business and give us an idea of how much we can expect and then help us acquire the investment.

I look forward to your responses. Thank you!

bjani,

 

Congratulations for all that you have accomplished.

I would need a lot more details before I could provide a specific answer for your situation - but here are some general comments:

1. There are "professionals" that prepare formal company valuations. Typically, they are used to in an estate situation or as part of a buy/sell agreement. While a formal valuation might prove interesting, it  might not "influence" a professional investor and certainly would not guarantee that they would use it for calculating their ownership position. Ultimately, for investments,  the "valuation" is determined by mutual agreement

2. Venture Capital firms have some criteria for the deals they make. You may not fit those, so you may have to use a different strategy for acquiring capital.

3. There are regulations (both state and federal) concerning "agents", so I suggest getting some good basic "legal" information first. 

4. There are a lot of people & companies that claim they can "find the money". some are professional, licensed and preform. Be very careful - do your homework.

5. From our experience, with a company at your stage - if you want to acquire capital, you and your team will need to be a big, active part of the process.

 

I hope this helps. If you want to discuss your specific situation, feel free to send me a PP or contact me directly.

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