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By Team Golf4you

golf4you explains the current company valuation

Public
Public

Dear companists,

Many questions and comments have been raised in the companists’ discussion forum concerning the valuation of our company. We would like to address this issue in an open and detailed fashion. We have therefore decided to disclose our valuation in order to provide companists with transparency.

In order to understand how we came to this company valuation, we would like to once again go into the process of how our company was established. We financed all the preliminary work ourselves and only set up the company, golf4you, at the last possible moment. This has the advantage that the company is burdened with the least possible “pre-losses”. However, this also unfortunately leads to confusion among companists and requires precise explanation. In the following, we would like to explain our valuation model. 

We used equidam for the valuation; this is a platform specialising on the valuation of start-ups for fundraising campaigns. The equidam platform has already been used by over 15,000 companies in order to present a sound evaluation by means of the application of several methods of calculation.

By disclosing the process, we hope to make the valuation comprehensible for all concerned. This will allow you to form an informed opinion and, where appropriate, to raise specific queries on certain points of the valuation.

 

Equidam makes use of 5 recognised methods for determining the value of a company:

  1. Scorecard Method
  2. Checklist Method
  3. Venture Capital Method
  4. Discounted Cash Flow with long-term growth
  5. Discounted Cash Flow with multiples

 

For golf4you, these methods result in an average pre-money assessment - that is, before the round of financing via Companisto - of EUR 3,136,217.

 

Valuation

Average pre-money valuation

 

 

1. Scorecard Method

 

The scorecard method is based on the technique of benchmarking. It compares the company with similar companies and adds to or subtracts from the value of the company, depending on the performance of the company against various criteria. The procedure is weighted with 19%.

The bar graph above shows how golf4you performs against various criteria in comparison to other companies in the travel industry. These percentages are listed again separately in the graphic below. The start value of the method of EUR 1,066,571 EUR gives rise to a valuation of EUR 1,253,221.

 

Scorecard Method

 

 

2. Checklist Method

 

The checklist method was developed by Dave Berkus, one of the most active business angels in the USA. Certain values are attributed to various functions of the company, which are then added. The procedure is weighted with 35%.

The presentation of the results is similar to that of the scorecard method. The upper area of the bar chart shows how golf4you performs against an average company in the travel industry. The evaluation criteria differ from those of the previous method. Using the percentages and a maximum value of EUR 2,000,00 results in an evaluation of EUR 772,800.

 

Checklist Method

 

 

3. Venture Capital Method

 

The Venture Capital Method is one of the most commonly used methods to assess innovative companies in their early stages of development. In this way, the exit value of the start-up is determined to the end of the forecast period. The procedure is weighted with 18%.

The bars show the operating cash flow of golf4you over the next three years. The final assessment uses the forecast EBITDA from Year 6. This is multiplied by the industry multiplier of 9.5 to arrive at an exit value in Year 6. This value is discounted by a rate of 127% to arrive at the present value. The result is a pre-money valuation of EUR 505,291.

 

Venture Cap Method

 

 

4. Discounted Cash Flow with long-term growth

 

Discounted Cash Flow with long term growth requires that the organisation survives with a consistent and constant rate of growth. The applied rate of growth is based on the relevant industry. The procedure is weighted with 17%.

The cash flows are weighted in the upper part of the graphic in relation to their failure rates and are then discounted using a discount rate. This takes into account various sector-specific risks and uncertainties. The assumed long-term company growth is determined by the industry affiliation. The value of the company is then discounted by an illiquidity discount. This is due to the fact that the sale of the shares is likely to be outside the stock exchange on the private market. Investors therefore require a higher potential for return when investing in a start-up. The result is ultimately a pre-money valuation of EUR 8,585,440.

 

DCF with LTG

 

 

5. Discounted Cash Flow with multiples

 

Discounted Cash Flow with multiples is based on the assumption that the exit value of the start-up can be determined as the average value in comparison with other companies in the industry. The procedure is weighted with 11%.

The procedure provides a mixture of the two previous methods. The cash flows are also weighted and discounted and charged with an industry multiplier. An illiquidity discount is then applied. The result is a pre-money valuation of EUR 9,792,253.

 

DCF with Multiples

 

 

Weighting of the Valuation

 

Weights

 

 

 

Summary

 

The weighting visible in the table was used to obtain the average of the results of the 5 applied valuation methods. The weighting is selected on the basis of the level of development of the start-up: the higher the level of development and the greater the influence of the analytical methods, the higher the reliability of the financial forecasts. Investors may, however, give one method preference over another in order to reach their own (personal) assessment. The last two valuation methods are based very much on company profits in the exit year and lead thereby to high valuations. Each of the five methods of assessment usually exerts an influence on the assessment with a weighting of 20%. With this weighting, the equidam method would actually have led to a valuation of EUR 4,181,801. However, we adjusted the weighting: we placed a greater weighting on the valuation methods that lead to a low valuation result the methods and we reduced the weighting on the methods that lead to a higher rating. Although this results in a lower rating, it is however, in our opinion, more honest, predictable and practicable. The resulting valuation of golf4you amounting to EUR 3,136,217 is advantageous for all investors.

In co-ordination with the Companisto, we reduced the real value and determined it to be EUR 3 million.

By using equidam, we were able to value our company by means of an independent and professional institution. The valuation made use of over 10,000,000 data points from comparable companies. By means of the predefined processes and algorithms, the valuation is largely relieved of subjective impressions and can be objectively argued.

We hope that this disclosure of the valuation has succeeded in providing transparency and thus also a certain degree of acceptance of the procedure. We look forward to receiving further questions, even those which are critical, with a view to being able to discuss these together. 

 

Kind regards,

Your golf4you team



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NOTE:

Investments in crowdfunding projects offer great opportunities, but they are risk investments. In the worst case, the entire investment amount may be lost. Consequently, these investments are unsuitable for retirement plans. However, there is no obligation to make further contributions. Investors can minimize their risk by splitting their investment amount between crowdfunding campaigns rather than investing all of it in one crowdfunding campaign. Professional investors often follow this strategy because it causes the risk to be distributed among several investments. In this way, successful investments can balance other less successful investments.

The shares of the Companists are subordinated profit-participating loans (partiarische Nachrangdarlehen). Such loans are shares in a business with similar characteristics as equity. If the company becomes insolvent or is liquidated, the claims of the Companists – just like those of all other shareholders of the company – will be satisfied from the assets in the insolvency or the assets in liquidation only after the claims of all other external creditors have been satisfied. Thus, Companists are treated like any other shareholder of the company during insolvency or liquidation proceedings.

The company information published on the Companisto website is provided solely by the companies. The projections made by the companies do not guarantee successful development of the company in the future. Consequently, crowdfunding investments are suitable only for those investors who can cope with the risk of a total loss of the capital invested. Investors make their own independent investment decisions and bear all risks themselves.

The investments are provided and issued by the individual companies. Companisto is neither the provider nor the issuer of the investments, but solely the internet service platform.

469

Companists

187,460 €

Invested

9.09 %

Share offered

Contact Details
golf4you GmbH
Hafenstraße 28
79576 Weil am Rhein
Deutschland

Email: investor-relations@golf4you.com
Website: www.golf4you.com
Please note
The acquisition of this asset involves considerable risks and can lead to the complete loss of the assets used.

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Andreas Riedel
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