The Cost-to-Duplicate Method
This method focuses on all of the costs associated with the startup and its product - e.g. staff salaries, distribution costs, marketing and so on. When added up, the investor can begin to put together an idea of the startup’s fair value. However, take care with this approach as it may not fully take into account the future growth potential of the business. It is also possible to neglect non-tangible assets in the valuation process (e.g. branding and patent value).
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