II. Financials

Business valuation

Understand what your business is worth, both on an intrinsic and relative basis, using the corporate finance expertise of our team. Well-executed valuation analysis is an excellent tool to support your discussions with investors.

At Ithaca we work with our clients to develop a clear and evidence-based understanding of the value of their business. Rather than being a number that you can calculate yourself, valuation should instead be viewed as an output, reached by balancing the beliefs held across both sides of a funding round transaction.

In order to form those beliefs, both sides can use a selection of clever analytical tools to infer the ‘fair market value’ of the company. Even when using these tools, the process of valuing a business, and an early-stage business in particular, is as much an art as it is a science. For this reason, it can really help to engage the knowledge of an expert to support your valuation exercise, and give you the confidence that you need to present it to investors!

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A typical valuation exercise with Ithaca would involve:

An introduction to your expert team
To be able to effectively contribute to a valuation exercise, a corporate finance specialist needs a detailed understanding of both the business in question, and the current market environment. At Ithaca we carefully match businesses to experts within our network so that you always receive excellent quality advice.
Gathering and review of information
Two types of data are required to run a valuation exercise – data relating to the company being valued, specifically forecasts of financial performance, and data relating to broader activity in the market.

In order to be credible, the financial forecasts of a business should be calculated using a detailed and flexible financial model (if you are feeling self-conscious about your model – do take a look here). Meanwhile market data points include the valuation and metrics of similar companies that have recently raised, as well as several macro data points.
Completion of analyses
Once the information has been prepared, the analysis will be completed using the discounted cashflow and multiples approaches (these are the most relevant for business that are in the seed to series b stage).

A discounted cash flow analysis provides an 'intrinsic' valuation of a business, i.e. calculated without reference to the values of similar businesses. This approach involves taking the forecast 'free cash flows' for a period of 5 - 10 years, so the cash that will be available to the owners of shares or debt, and determining how much that income stream is worth today.

The multiples approach involves finding similar businesses with known valuations, either 'trading' or 'transaction' valuations, and comparing their operating metrics to those of the business being valued.

For more details on these valuation approaches, please see here.
Dilution sensitivity
Finally, we can help you to understand the level of dilution that you will incur at various valuation points. This simple tool will be added to your valuation analysis as a helpful reference point. Of course, the other key input to dilution is the round size, so this will be flexed as well.


Arun K.
Jewellery business, Founder

Ithaca was able to provide hands-on support to put together a financing plan in very little time.

Through the platform, we were connected to a handful of freelancers based on their affinity for our business model and their backgrounds (it was great to see all had blue-chip financial institutions backgrounds).

Our specialist was pragmatic and results-oriented – she understood our business inside out and was able to deliver with minimal oversight.

The app was user-friendly, intuitive and real added value, as it helped us navigate all the steps of the project, from matching and outline, to delivery, to payment and completion.

Tomás L.
Hardware technology company, Founder

We wanted to update our internal operating model and perform a valuation analysis on our business.

Our specialist did a great job of pinning down the key drivers of our company and remodelling projections using a more realistic, simpler framework.

The valuation analysis was extremely detailed and touched on all the key valuation methodologies.

It is not our first time using freelancers or freelance platforms in the past, but the end-to-end focus on project delivery made Ithaca a fundamentally different, superior experience.