The Science behind Soaring Start-up Valuations with Marginal Revenue
Nowadays start-ups have been measured by their valuations. Though there are many other parameters valuation is one such parameter that is a popular way to judge the capability and success of the company. Frankly, the math behind this valuation is quite tedious but it’s the gist of the performance parameters. Every time a start-up raises funding, a valuation number comes up which rates the current status of that firm. In India, we have ~40 start-ups that have been valued at over $1 billion and there are many inline which are close to that mark.
But few eyebrows have been raised recently on the logic behind these valuation calculations. The question is why the start-ups which are struggling to turn profitable or even not to generate any revenue have been valued so high. Usually, we measure the success of the company by