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Hoots : How to value digital asset for a startup? How do startups value their digital assets in their accounts? A website or a social media account that generates revenue? - freshhoot.com

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How to value digital asset for a startup?
How do startups value their digital assets in their accounts? A website or a social media account that generates revenue?


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If there is yearly growth of revenue then that situation suggests very significant value.
If there is no growth of revenue then that situation suggests a low price-to-sales ratio and then look for industry standards for low-growth companies.
The website can be valued by any means if there is yearly depreciation of the value. If the yearly depreciation is greater than the yearly revenue then obviously that is yearly loss on a gross basis.
Without revenue I personally have one novel note for software development of: Value = CostOfDevelopment / (1 - CompanyGrossMargin)
But websites are also concerned with the number of users. And if the website programming is very easy but then the interest in the website is very good then cost-of-development is not enough valuation. Or possibly cost-of-development is enough valuation since on-going development is just expense against a core business.
Or here is a link: corporate.findlaw.com/intellectual-property/decoding-the-value-of-software.html .


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