Benchmark Valuation for a start up

[Tom Waits]

Hello. I've searched for hours on the internet but with no help yet. Can anyone offer anything on the following?

I would like to see some benchmark data on valuations achieved for FIRST ROUND financing deals on restaurants (mainly in the UK but data from anywhere would be helpful). I know how to value companies (multiples, DCFs, venture-cap method etc) but what I would like is some COMPARISONS. I.e. any data possible that shows, "Restaurant X took an investor who put in £100,000 for 25% of the company" for example. I can do my own valuations using all the common methods but what I want to see is what valuations were achieved by others. I specifically want to see data on very new (especially including non-trading) companies. Since for non-trading companies all estimates are just a massive wet finger in the air, clearly a large discount would be applied to any final number. I'm curious what that discount could be.

Please don't tell me 'it depends'. Would really like some hard data.. if anyone has any useful links!?

 

[@aiteoconsulting]

Have you had a look through here: https://angel.co/restaurants-1

 

[Tom Waits]

Hi Aiteo, thanks for your help.. I hadn't seen that link. Although from what I can see that page is listing restaurant service companies: tons of tripadvisor/deliveroo etc style apps and services... no actual restaurants.

 

[Clinton]

Since for non-trading companies all estimates are just a massive wet finger in the air, clearly a large discount would be applied to any final number.

I don't believe that that's quite how it works. You don't start with a large number (or the founder's projections) and apply a discount. Discounts are applied in various valuation scenarios - like a Key Person Discount if the business is very reliant on one person - but not always.

Restaurants are old-school and tend not to raise crowd finance so you'll struggle to get the data you seek.

My expertise and interest is more with tech companies than restaurants, and a contact of mine recently posted this in LinkedIn. It doesn't solve your problem, but it does point to the big factor influencing valuations for early stage businesses.

 

[Tom Waits]

Appreciate your help Clinton. I understand your point and partly agree with you. I wasn't so much interested in the discount to initial forecast valuation, simply the amounts raised for non trading or very early stage restaurants. These days quite a few people do crowdfund in this area and I found 6,7 examples on Crowdcube. I was just looking for a broader data set and wondered if anyone had seen any research.

 

[ethical PR]

Have you tried the business research centre at The British Library?