How Is a Business Valued on “Shark Tank”?

How the entrepreneurs and the Sharks value the businesses presented on the show will likely vary, but a good valuation of a company takes into account certain factors such as present value, future value, the value of companies similar to it and risk, said JEA YU in the post on Investopedia

Let me summarize How Is a Business Valued on “Shark Tank?”

1. Comparing the entrepreneur’s business to similar publicly traded companies and sectors or industry average financial ratios.

2. Forecast annual earnings growth for the next three years.

3. Valuation Based on Risk. The lack of liquidity creates more risk for the Sharks to bear, which entails applying risk-adjusted discounting to make the reward worth the risk.

How could a Shark value your business? We can help you to know it.