Details
- Conceptual approach for valuing an entrepreneurial enterprise.
- Real world examples of the application of the approach.
Entrepreneurs generally lack the marketing capabilities necessary to bring their new product to market. To engage the resources required to do this, they must somehow place a value on the enterprise. However, all of the methods of valuation currently available are based on the use of historical or current revenues, and therefore are not applicable to an entrepreneurial enterprise with a first-time product. In Valuing an Entrepreneurial Enterprise, Audretsch and Link present a valuation method uniquely tailored to emerging technology-based ventures that have no revenue history to lean on. Unlike many traditional methods, theirs does not take into account the track record of companies and products similar to that being valuated. Instead, it draws on economic theory to formulate a solution to the problem.
The book develops conceptual ground, including trends in entrepreneurship, models of innovation, and the economics of standards and entrepreneurship policy. The authors review the traditional valuation methods and illustrate them numerically with case studies to show how the traditional approach produces an incorrect valuation. The core of the book presents the new methodology and demonstrates how it avoids the pitfalls of past approaches. The authors also show how public policy on technology and infrastructure changes valuations of start-up firms in areas such as stem-cell products and renewable fuels projects.
Valuing an Entrepreneurial Enterprise will serve as a valuable resource for advanced students, economists, financial planners, and valuators interested in new valuation methods and the theory behind them, as well as those interested in entrepreneurship.
Readership: Valuation experts (primarily accountants) and Professors who teach continuing education courses in valuation.
- About the Authors
- Introduction
- Innovative Activity: Alternative Economics Frameworks and Policy Approaches
- Valuation Methods: Tools of the Trade
- Traditionally Used Valuation Methods
- Applications of Traditionally Used Valuation Models
- Alternative Approaches to the Valuations of Video, Inc.
- Toward a Method for Valuing an Entrepreneurial Enterprise
- Valuation of Metal Brothers, Inc.
- Concluding Statement
- References
- Index
David B. Audretsch, Distinguished Professor, Ameritech Chair of Economic Development, and Director of the Institute for Development Strategies, Indiana University, and Albert N. Link, Professor of Economics, University of North Carolina at Greensboro
David B. Audretsch is Distinguished Professor, Ameritech Chair of Economic Development, and Director of the Institute for Development Strategies at Indiana University. Albert N. Link is Professor of Economics at the University of North Carolina at Greensboro and Editor-in-Chief of the Journal of Technology Transfer.
"Entrepreneurship has become a crowded space today with scores of new books published each year. Many of these are just run-of-the-mill projects repeating what we already know. When a new book comes along that offers a fresh insight into a still under-researched area it is worth getting excited about. Valuing an Entrepreneurial Enterprise by Audretsch and Link, two of the leading scholars in the field, is just such a book. The book is about valuating a high technology firm (what is it worth) and they suggest that we should focus on complementary technologies not substitute products. In other words, the authors suggest that the existing yardsticks are not a good measure and may be misleading at best. They offer a new and novel approach for valuating an entrepreneurial venture."--Zoltan J. Acs, University Professor, George Mason University
"In the midst of an entrepreneurship revolution sweeping the globe, David Audretsch and Albert Link astutely analyze one of the most important questions: how to value the new, entrepreneurial firm. Demonstrating that conventional valuation tools and economic analysis are inadequate to the task, the authors provide a valuable underpinning to the entrepreneurship movement."--Dr. Carl J. Schramm, President and CEO, Ewing Marion Kauffman Foundation
"Small, technology-based start-ups renew and grow the economy by introducing new products to the market and are a key source of high-value employment. They make significant contributions to the nation's competitiveness. But, for the lack of proper methodology, the contributions of these firms have been inadequately valued. And, too frequently, that which is not valued fails to garner the necessary attention and support of policymakers. This is why this book is so important. David Audretsch and Albert Link clearly and carefully show that forecasting alternative or complementary technologies and estimating their market impact is the key method to valuing a high technology entrepreneurial enterprise. It is well done and extremely worthwhile for academics and policymakers alike."--Dr. Charles W. Wessner, Director, Technology, Innovation, and Entrepreneurship, The National Academies Board on Science, Technology, and Economic Policy
