As we said in previous occasions, at Fellow Funders we would like to make investment in startups closer to individual investors from a professional point of view and following high-quality standards used by the big investors. One of the main aspects in our model is the Valuation of the company and the Objective Valuation Report
Valuation of the company
After making the Scoring in the company/project and having obtained a minimum score of 65 points in Fellow Funders, we determine the Pre-money value of the company. It means that we make a valuation of the startup before the capital expansion through Equity Crowdfunding. What do we like to define with this valuation?
- How much the company is worth.
- Why is it worth
- What percentage of the company will the entrepreneurs give up.
- What do you need the money for and if it is enough.
- What will be the possible EXIT (the way in which the investor recovers his investment and obtains profits).
At Fellow Funders we have developed our own Valuation Model which allows us to make a close valuation of the company/project by using quantitative and qualitative elements and mathematic and statistic proceedings.
If any of the projects at this stage does not comply with the principle of fairness after this assessment, this is not adequate, the need for the money is not justified, or the way to reach the Exit is not reasonable and the project will not be uploaded to the Fellow Funders platform.
Objective Valuation Report
Finally, if the project goes ahead, and as we know that the time of investors and entrepreneurs is scarce, at Fellow Funders we have designed the Objective Valuation Report. In this report, the Fellow Funders team will give its opinion on all the relevant aspects of the project, thus being able to summarize its benefits and risks, with the goal that the investor knows everything necessary and is aware of the company in which he/she can invest.
Fellow Funders wishes the investors to know if the project conforms to the investment portfolio defined, and if it meets the risk and profitability expectations expected. All of this with the aim of being able to create a portfolio classified in sectors, risks and possible profitability.
Please note that only Fellow Funders Investors have access to the Objective Valuation Report. Likewise, when you register as an investor you will be able to access the Investment Room or consult all the detailed documentation of the projects. Signing up as an investor is a fast and free process.
Next week in Chapter 4 we will discuss all the project documentation that Fellow Funders makes available to investors and the usefulness of the Investment Room in the investment decision making process.