Valuation Review
"We need to know what our valuation is so we don't give up too much of the company. We need expertise that understands the black art of valuing private companies."
CEO Problem
Not the specific "company value" per se. The CEO's need is to generate a credible basis for establishing the company's pre-money valuation range. Valuation always comes down to a negotiation, so a single "price" can be meaningless without a credible basis. In fact, lack of a basis with numbers by an outside "valuation expert" can cost credibility and devalue the company in the eyes of the customer. The CEO must recite well tested business arguments that support the valuation. The process of testing those arguments against a panel of experts is known by marketing experts as simply: price testing.
The CEO is selling an intangible equity product. Customers will pay for intangibles once they understand them very clearly. Perrier sparkling water is one example that must be clearly understood before customers will pay above the market rate for water to acquire the added benefits of 'prestige.' See benefit "Message Testing & Refinement."
Program Features
VenLogic has featured valuation experts in previous programs, who provide best-practices feedback to company valuation rationale. Valuation experts bring sophisticated modeling tools designed for identifying valuation ranges and transforming the numbers into a story which forms the basis of credibility behind the company's argument. See features "Message Testing & Refinement."
Program Benefits
Price too high, or too low and the customer will not buy. Price affects positioning, which drives the purchase decision. All the messages need to sync together. See benefits "Message Testing & Refinement."
Recommendations
Messages matter - especially the message of price. CEOs need a safe environment to develop their rationale before and after taking their equity product to the customer. Only through a carefully managed price testing and message refinement process will the company develop its basis for valuation. See recommendations "Message Testing & Refinement."
