- Despite various startup valuation techniques, reliance on industry benchmarks is common in online fundraising. Overvaluation is a prevalent issue among startups, irrespective of the valuation method employed.
- Understanding the valuation of other startup offerings is crucial for investors engaging in Equity Crowdfunding (ECF) deals. KingsCrowd’s updated valuation-to-revenue industry data chart aids investors in assessing a company’s valuation against industry standards. Only companies with $50,000 or more in revenues were included in the data used to make the chart.
- Investors should use this chart to understand whether startups are overvalued. They should prioritize industry median valuation-to-revenue ratios over averages, as outliers can distort average figures.
- Assuming that all other factors are equal, investors looking to prioritize high returns should favor startups that have valuation-to-revenue multiples lower than their industry medians.
