Everyone would like to know what their company’s worth, but not too many want to pay a few thousand dollars to have an accounting firm review the numbers — especially if you’re not planning on selling anytime soon.
Now, with some basic information, you can get a pretty fair evaluation of just how much the company might sell for at Capital.com — and it won’t cost you a cent.
“This tool grew out of our years of experience as an investment bank,” says Mark Opel, chief operating officer at Capital.com. “It allows a company to do a sophisticated valuation, online, free of charge.”
The mechanics behind the valuation tool were the same ones the company used to make its own valuations.
“It is grounded in basic financial principles,” says Opel. “We just migrated it to the Web. We think it’s the best valuation tool on the Web, period.”
As with any valuation, the numbers at the end of the process are only as good as the numbers you put into it, both historical and projected.
“There is a certain amount of art in any valuation, but you will come away with a sophisticated and detailed report,” says Opel.
The entire site is geared toward companies with annual revenue of between $1 million and $200 million. There are two methods of valuation to choose from, discounted cash flow and public company cash flow, depending on which one best matches your company. Once all the data is entered, the site calculates a valuation in about a minute.
“You are getting a very sophisticated tool that up until now was entirely in the domain of investment banks and intermediaries,” says Opel. “It wasn’t available without having to pay. This gives people the power to go to the Internet and get a valuation for free. We hope people use it once, then continue to update their numbers. A CFO could incorporate into a report how the company’s valuation has changed from year to year.
“We don’t represent that the valuation is a final number, but it’s a real good start.”
Capital.com, owned by American Capital Strategies, is using the valuation tool to attract people to its site and introduce them to its other finance products.
“We’re taking the knowledge we’ve gained over the last 15 years and bringing it to bear over the Internet,” says Opel.
How to reach: Mark Opel, Capital.com; www.capital.com
Todd Shryock ([email protected]) is SBN’s special reports editor.
