My company has proven technology to convert existing in use Heavy duty diesel engines to run on Natural Gas and pass current EPA/CARB emissions standards. This makes us a unique provider of a unique product with high demand. Until we do the EPA/CARB certifications ( which cost % $250,000 per engine type) we cannot sell in the USA, but we have MOU/LOI from several fleets wanting to convert once the certification is issued which amount to $4 million in first year sales/$3 million in gross profit. Projected annual sales grow by 300% for the first two years. We are raising money to pay for these certifications ($2 million). Looking to determine pre value. Other methods- Comp sales are for Automotive conversion companies- $13 Million and $16 Million in 2010. Technology purchase cost- closest thing is Westport Innovations-T. Boone's company- $808 million Cap currently- has one engine certified, we will have 10. Any suggestions appreciated.
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Company valuations are very hard to make. The only true answer is "what someone else is willing to pay for them" ... but there is a few metrics you can use to judge it by:
Pretty much you should calculate all of these and use them to triangulate a figure by something like the Average $figure + 1 standard deviation. |
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I recommend that you do a 5-year full Income Statement projection (baseline model) for your business based on your certifications today. I am assuming you are successfully doing non-US-based business today. Once this is completed create scenarios off the baseline based on adding x number of US-based certifications. You will now know your valuation based on zero US certifications and x number of certifications. You should be able to use these valuations to determine how much value $x in investment adds to your bottom line. I am assuming additional certifications will be funded from both investor funds and profits. By completing this analysis you can determine your pre-money valuation. Hope this helps. |
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