SPEED, POWER, AND FLOW: USE SURF CRITERIA TO RATE START-UPS

To measure the value of a company, traditional valuation models look at certain variables, which tend to be quite objective and concrete, such as traditional assets or at least some mature state of revenues or cash flow.  While some models are more complex than others, most of them rely heavily on assumptions and some level of acceptable and shared semi-rational delusion regarding what value truly means. However, start-ups are in a different world. Not the world that is, but rather in a world that may be. Valuing them sometimes seems more an exercise in imagination or gambling.  How does surf relate to start-ups? In our analogy, the speed-power-flow criteria of surfing competitions can help us evaluate three fundamental dimensions of start-up competitiveness and success. The speed-power-flow triad provides a quick, yet reliable way to assess the go/no-go value of a start-up, as well as more comprehensive valuation of its potential. Investors do not have infinite resources or risk tolerance to invest in any or all start-ups. They have to spot, accurately and correctly, the best quality start-ups within each wave.  Investors can also profit from the speed-power-flow framework to select and invest their assets in quality start-ups with a high probability of success.  Read More >>

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