A session on startup valuation took place at the Faculty of Business Studies, University of Dhaka on May 23, 2022, for the students of Department of Finance. The session was conducted by Shoumik Shahriar, General Manager – Finance at 10 Minute School. It was moderated by Mohd. Anisul Islam, Assistant Professor, Department of Finance, University of Dhaka. The session was held at the Professor Habibullah Conference Hall of FBS-DU.
The learning arrangement was a part of the academic course “Financial Statement Analysis and Valuation”, which focuses on analyzing the financials of companies and determining their value. While most of the course content thus far discussed analyzing and valuing public companies, this session shed light on the important topic of valuing private businesses. The concept of valuing private companies and startups is a challenging topic as information regarding such companies is scarcely available, unlike public companies.
The speaker of the session, Shoumik Shahriar started the session by giving the students a quick rundown of the topics to be covered. He pointed out 6 broad topics that are relevant to startups and their valuation. Then, he started the session by defining what a startup is. He clarified that startups are not just any new businesses. Startups are businesses with high growth potential and scalability that have involvement with technology. Startups in different phases raise money from different potential investors to boost the business.
He then discussed both the various stages of growth of the startups as well the phases of fundraising. This is where the necessity of valuing private companies like startups come in. In order to make successful investments in private companies and startups, investors need to correctly measure the value of the companies with scarcely available information. Different startup accelerators, VC funds, hedge funds, and angel investors have different methods of valuing startups. There are now not only international institutions but also Bangladeshi institutions that are looking to invest in various local startups.
Mr. Shahriar then discussed the key variables and topics that are relevant to startup valuations as well as the common methods that are adopted by investors to value startups in different stages of the business. He stated that while institutions have their own methods of valuing startups, there are some common methods that are adopted by most organizations to some extent. He then proceeded to discuss 6 different startup valuation methods based on the different growth stages of the startups.
After the discussion, a Q&A session took place where Mr. Shahriar answered all the questions of the students and helped them get a strong grip on the topic. As an alumnus from the 21st batch of Department of Finance, University of Dhaka, he was able to connect with the students very well, which enhanced the interactions and made the session more fruitful.
Finally, the session was concluded as the moderator, Mohd. Anisul Islam, as well as the students, thanked Mr. Shahriar for his valuable time and insights. Mohd. Anisul Islam added that the contents of the session will be useful both in the academic and professional lives of the students as concluding remarks and wrapped up the arrangement.