3 ms·
How to measure the profitability of a startup? 3 simple methods.
- danielha 19y agoThose are just some generic and basic return ratios and much less relevant to the size of most of these web startups.
- yubrew 19y ago^ Agreed. Most businesses determine their worth from net present value, comparable sales, or capitalization rate based on net operating income. A problem with these web start ups is that they often don't have substantial income, and often do not have comparable sales. Two years ago, who honestly thought that $500mm for MySpace turned out to be a bargain?
- szczupak 19y agoDanielha NPV, IRR are good measures too, but I think 90% of investors still use ROE, ROI, ROA etc.