Start-Up Valuation : Typeform valuation : Disrupting online quizzes

Start-ups have been on the mouth of everyone in the financial industry since some disruptive business entered into our life with fresh ideas and a way of doing things differently. We are of course talking about Facebook, Instagram, Glovo, Uber, etc. This paper will focus on how to value a start-up. But, first of all, what is a start-up? Start-ups are not only unique because of a magnificent (or not?) idea coming from their founders, but because of their financial performance. Start-ups are fast growing companies with a high risk of default. This fact, makes them very difficult to value with traditional methods which are thought for mature companies having more or less predictable cash flows. In addition, by their nature of exponential growth, it is very important to know at which stage a start-up is (early-stage or pre-IPO?) in order to assess the risk associated with the investment. Once the nature of start-ups has been completely understood, we must define which valuation methods exist and when to use them. Traditional valuation methods (such as DCF or relative valuations) can be very useful for mature companies. However, some newly adopted methods by the Venture Capital industry have been defined in Section 2. Finally, at the end of this paper, an analysis and valuation of Typeform has been conducted – taking as a reference the Series C raised in March 2022. Founded in Barcelona, and co-based in Barcelona and California, Typeform has disrupted the online forms and questionnaires. In addition, the company is on the Top 3 candidates to IPO as an unicorn in the following 1-2 years. 4 Finally and to conclude, some final valuation conclusions have been presented and a brief description of what to expect from 2023. Given the last 3 years, where the market had an excess of liquidity, it is important to understand that the market is now more cautious and waiting for the macroeconomic environment to calm down a little bit. Examples of companies that have failed in their I