Business valuation is a process that estimates the value of the startup. It can also determine the value of an owner’s share in the business. It’s like a jeweler appraising a rare gem’s value.

The process is usually conducted by a professional valuator to make sure that the figure arrived at is an objective estimate. Normally it involves looking at the company’s assets, its market value, or its earning potential before issuing a price tag.

Business valuation may be required in lawsuits, buying or selling the company, securing funding for the startup, strategic planning, and other situations.

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