IPO-on-wall-street

IPO Trend

In the recent years, there is a continuing proliferation of IPO (Initial Public Offering) involving technology companies such as Snap Inc (Snapchat), Dropbox Inc and Xiaomi Corporation.

Most of these companies celebrated their stock market debut during the first day of trading.

It’s not surprising to have this phenomenon as their innovative business models, products or services are favoured by many investors nowadays.

This is even so for the angel investors or venture capitalists in seed funding phase, series A, B and C funding.

 

Notwithstanding the huge gains made by these early investors upon IPO of the companies, you may be curious about how they choose to invest in certain companies including some start-ups.

One of the common approaches is to conduct business valuation by applying valuation methodologies which are in accordance with International Valuation Standards.

This may include income, cost or market valuation methodologies.

Such a structured approach helps the investors to manage their investment risk and be able to understand the key growth value of a business.

 

In addition, the business valuation will sometimes be used to gauge the offer price of an IPO as it is carried out by qualified valuers using internationally accepted standards.

Here are some tips to prepare your business for an IPO.

Most of the time, the business valuation will uncover the assets owned by a company – patent, trade secret, trademark to name a few.

More often than not, the value of these assets are significantly higher than the traditional assets of a business including plant and machinery.

This is clearly observable in those successful listings of the technology companies.

 

If you are wondering how much your business is worth today or have a goal of listing your company in stock exchange, talk to us today for free professional advice and we will be glad to share more with you.

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