Simple Guide To Valuing Your Business for Investors

When was the last good conversation you heard about investing and valuing your business? I hope this video will prove inspirational whether you have a company you want to get people to invest in and you’re trying to figure out how to communicate that to them, or whether you are looking for a good company to invest in and want to see a presentation that’s inspirational, that will give you an idea of what kind of opportunities are out there.

This is a presentation about my company and I hope the format is useful for you whether you have any interested in what I do or not. I’ve made a cool format here using Excel spreadsheet combined with showing what I do online and I will explain every part of that, what each number means, and exactly how this could be really cool for using as a presentation.

First, my company is known for internet marketing online all over the world in sharing free help and resources, creating online courses, building a YouTube channel and on my website. This is my website, you can see that there’s tons of articles on it. My Udemy courses are linked and it defines what I do online.

That website is one part of my company and explaining the value along with this spreadsheet, I will highlight each relevant detail so if you’re looking to do the same, you will want to bring up all of the exact points that make your company valuable and worth noticing online.

I will try and lead by example on that. I have thought a lot about investing in companies and tech especially and learning about how it is to make a good presentation to communicate the value of a company especially when assets are hard to define when they’re online and matching that up with hard numbers.

I’m a math guy, I love numbers, and I love putting them together in a way that makes sense. This is what I have put my current company value at, based on each day in business. The value that I would sell my entire company, all of my resources online for. I put bitcoin in here because bitcoin seems to make a great platform for sharing an investment price. I have a friend’s company I work for, he has valued his company in Bitcoin for around the same value and that’s what inspired me to go through this for my company.

$354,772.84 is the 10 percent. What I’m offering to do is give a fixed percentage of my company for sale and that would be ownership of the company so it’s not any kind of convertible debt loan or anything like that it’s straight up ownership in a private company. That would mean you get a percentage of the profits each year but the only liquidity is being bought out by me or being bought out by someone else who wanted to buy it and then I’ve put that same number in bitcoin. That’s the maximum number I’m doing. 3,547.73 is the minimum, that’s a tenth of a percent.

If I got 100 people at a tenth of a percent, it would work out to the full total and with the new regulations allowing number of investors before needing to go public, I feel like this is a good format, that’s the bitcoin number.

That’s what these numbers mean and regardless what kind of company you have, I feel like this might be a cool way to present it. How did I get to these numbers?  I think it’s pretty cool how I got to these numbers and here’s how I did it.

current vale of the company

These are the columns explaining each US dollar company value Bitcoin, with the current price, not the bitcoin price at anytime even though this is my company over time.

maximum and minimum that company can be sold for

This is the maximum I’m selling of the company and the 10% costs in bitcoin and then the minimum. The part I think is really cool about this video is how I’ve taken the company value from 100 dollars the day I started it and I’ve accounted for the company value 1 day at a time all the way through to where I am today.

Day 1 Valuation of the company

This is day 1 when I started my company online naturally it’s worth nearly nothing. In fact, having a website and liabilities, probably worth less than nothing. And what I was looking to do when I started my company is to get a little bit better all the time.

What I’ve done to begin is I started at $100, the amount I would’ve accepted that someone could’ve given me and bought the entire company for. And what I’ve done since then is try and make incremental improvements every single day to my company.

When I first started my company, making an incremental improvement turned into about 3%. I could do about 3% better and make 3% improvement from one day to the next. If you have all of the actual statistics rated by someone of course it would turn into some days what I did made a 15, 20 percent improvement and other days it might’ve actually been a negative change, but it averages out in the beginning to about 3% everyday that I made a positive change to my company and raised the value of my company by about 10%

Let’s take a look at how that goes along. The first few days, first few weeks of my company’s existence. I put in and guessed around about 3% would be appropriate for the positive changes I made to my company through the first hundred days. That is when I started getting close to some better money making opportunities, started building some more fans online and had something more than just a website.

Around the hundred day mark I transitioned and dropped it down to about 2% a day because I started to build enough online that 3% every day started to seem a little bit overly optimistic. At this point, after about 100 days, I put the change down to about 2% every day. 2% I’m making it a little better.

Around the four month mark is when I started to actually make some money and have some more concrete support for my company value in terms of revenue. You’re looking at a few hundred bucks some of the months, it was probably worth a few thousand to take it all over then, if that.

Then you keep going forward. 2% every single day. Right around here I started to have months where I’d make around a thousand dollars and continued consistent growth. I looked at for the first hundred days I did about 3% every day on average and then the next hundred days about 2% improvement, every day on average.

Now into day 200, you’ve been though a few months, over 6 months. I already was to the point where I was looking to quit my full time job to work my company online. At this point it, I refined what I did enough that was starting to get harder to make 2% improvements every day.

The more you get the harder it is to make percent wise improvements. For example, if Google could even make a hundredth of a hundredth of a percent improvement one day their company value would go up gigantically. That’s what their system is set up to do is consistently improve a little bit each day. That’s the same thing my company is set up and designed to do, too. This chart does a good job at reflecting at what pace I did that.

So for the next several days, I knocked it down to a 1 percent daily improvement and by this time, after the first year, I was already having months where I’d make several thousand dollars and these were all direct marketing campaigns, straight to the actual consumer. By this time, I’m starting to get repeat orders and I’m consistently improving my business process where into the next year I’ve started to acquire clients that are paying hundreds of dollars on services that cost nothing except time to deliver

I’ve basically by this point made myself a job rather than an actual company or business system. but around here, I’ve hit the beginnings of a good business system and I continually worked each day on average to improve about 1%.

Some days, of course, realistically there was no improvement, other days there was huge improvement, and other days a little less but my mindset is consistent daily improvement on what I’m doing so you’re looking now into next year. Some of these months I’m getting into the one percent improvement, I had months where I’d make several thousand dollars and month where I’d make ten thousand dollars and twenty thousand dollars and I had picked up hundreds of clients by the end of the second year in more than twenty countries so my business system continually is getting more challenging, more significant in terms of branding, recognition, more clients online.

As you go along and you get towards the end of the second year, I’m consistently still doing 1% each day improvements but here, I drop it down and say it’s realistic, about this point, to drop it down to a half percent. By now I’ve got a YouTube Channel I’ve started. I’m starting to build things that grow on their own independent of my daily work

I’m beginning to make something that’s more of a business system than simply a job and a system that other people are starting to be plugged into on odesk  to help serve the system outside of me. I’m starting to make something that relies less on my and more on the system surrounding it. To reflect the existing size, I drop it again – half percent improvement each day.

At this point, for having a company worth about a million dollars that’s made it this point a little over a hundred thousand in its first, less than two years of existence the growth is rapid and apparent, but changing for the good tends to get more challenging. I’ve dropped it to a half percent to reflect this reality.

Going forward as we roll into this third year of my business. The business is continuing to grow each day a half percent and the opportunities and the organic traffic is consistently getting better and better and better every day.

With just over two years here, a half  percent consistent growth is really trying to add up. I consistently have days where I can add around $10,000 to the company in one day. I can do that my making positive changes on my YouTube channel, my videos, and right around here, I started setting up some online courses which, so far, are proving to be the best income opportunity I’ve made so far because once the course is up it’s just a product then and it can sell disproportionately to the amount of work I do on it. These changes happen in actual events made each day, but the mindset matches the value where I’m consistently working to do a little bit better all the time.

With the company being valued up to 2.5 million at this point I take another drop to account for the increasing defaulting of doing percent wise changes. I now drop it to where I’m looking at a tenth of a percent to 1/1000 improvement every day.

You can see this drops from adding 12,000 in value here  and it drops down below to only adding a few thousand a day to account for the consistent rising difficulty of doing better in part of a bigger system.

Going from 100 to 1000 was really challenging but taking a business up from 2.5 million to 3 million can be much more challenging to do on a consistent daily basis when reflected in percent. A lower percent but a bigger foundation to start on so you can see I’m continually going through here and building one day at a time, building a little bit more value into my company. Everything I’m doing being lined up to build more value daily into my company at a 1/1000, or tenth of a percent, ratio.

(Screenshot: 13:49, Annotate 1167)

Now you can run all the way into present day. This is today. 1167 calculated from when I started my business. Today is Dec 15, 2014 this is today. This is where I value my business at 3.5 million dollars based on the resources I will go to highlight for you in a minute.

Offering 10% of that for sale is offering to raise a maximum of $354,000 today which is equivalent to around a thousand bitcoin with the minimum being 10 bitcoin or $3500 to buy in for a tenth of a percent. With this value it’s important to communicate where exactly I’m getting a value like this.

You can see how I’ve build the value going from nothing and making steady improvement. You can see into my mindset about how I’ve gone about building this value with the idea of consistent small improvements every day. I feel like if you’re trying to get someone to invest in your company, communicating your mindset is just as important if not more important than trying to communicate any of the actual values or any of the actual resources.

People invest in other people. Ultimately the mindset of the person you’re investing in, I would think makes a huge difference. If I was investing in someone, I wouldn’t want to invest with someone who didn’t have a mindset that was similar to mine. For me I love the 20 mile march approach, as it’s called or the consistent daily improvement.

I try and do a little bit better every single day and make a system that is valuable to people. That communicates clear value to people because then I end up getting paid well out of it and I can give other people opportunities out of what I get paid.

This is the current value I put on my company and I will show you now more clearly how I see that value coming into reality instead of me increasing percents on a spreadsheet.