💃 Balance Sheet Ballet

If you get an offer to buy your company, the second most important number on the page may be the working capital calculation. If your offer does not include details on the working capital calculation, be sure to lock that number down before you agree to anything.

The venture capital method is not a definitive way to value a company, but rather a back of the napkin approach that VCs and angels can use to back out a valuation for an early stage company. We determine what we think the company will be worth at exit through market conditions and industry multiples, then divide this number by the anticipated retu