How do companies get valued?

michaelt79 — Wed, 13 Oct 2021 18:42:01 +0800

Hi all,

I'm just wondering how does a typical start-ups get valued?

Let's just say: -

Bro A has a company with multiple subsidiaries in various countries. Let say Bro A wants to sell on of his subsidiary that has operation in Thailand.

Bro B has a company and wants to acquire Bro A's company in Thailand - but doesn't have any cash. So, it will be a share swap deal.

Bro A sells it's Thailand subsidiary for the amount of USD 50 mil, in a share swap deal with Bro B. Bro B say you can have 5% of my company share. This makes Bro B's company worth USD 1 billion (5% of the company is USD 50 mil).

In return, Bro A get to value it Thailand operation at USD 50 mil. If Bro A Thailand operation is valued at 5% of the total company, Bro A also now has a USD 1 billion valuation.

Funny thing, both Bro A and Bro B company isn't worth USD 1 billion. For a start-up, no body knows how it'll be valued. Both company probably don't make any profit yet.

So, is it the norm for the everyone to value their company based on the scenario above?

30 and over RM60K per annum, par or below par?

michaelt79 — Thu, 23 Apr 2009 15:57:35 +0800

I believe everyone will wonder about this one time or another. So, I'm asking everyone if you're higher or lower when you were 30.

I'm 30, and I make in excess of RM60K per annum. I always wondered if I'm at par or below par with the general public.

No point asking my the people in my office because I'm not sure if my company is paying within the market or not.

And no point asking what job because I'm only concern about the money. Of course, someone who's a doctor or architect will definately be at a different range. Any not comparing to businessman because they took the risk and they should be making the money if the business is successful.

And also, I hate comparing what car a person drive because I owned a sub RM50K car, but I own 2 properties - both also landed and I don't stay with my family. I have a friend who owns a BMW but doesn't have any property and staying with the family, so no point comparing cars.

The only apple to apple comparison is age and salary. So, please tell me what you think. Better. please tell us what you're making too:-)

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How do companies get valued?

30 and over RM60K per annum, par or below par?