The Berkus Method: Valuing an Early Stage Investment.

For those of us who’ve invested in early stage companies, especially technology startups, we have confronted a universal problem. There are many ways to project the value of a company for purposes of pricing an investment, but all rely upon the revenue and profit projections of the entrepreneur as a starting point. Many formulas then discount those projections according to some set percentage or by assigning weight to elements of the enterprise.

by Dave Berkus

Full Story: http://berkonomics.com/?p=1214

(Many thanks to Bill Payne http://www.billpayne.com for sharing this)