What Matters in Startup Valuation: Startup, #1

By Dr. Kenji Ng

In What Matters in Startup Valuation, Dr. Kenji Ng contributes two decades of experience into this essential book for anyone with an enterprising spirit and enthusiasm. As one of the startup-industry's most tenacious, creative, and bold strategists, Dr. Kenji contributed to the leadership of one of the noughties' great corporate evolutions in Asia, by converting small, normal startup customers into zealous business evangelists and serial entrepreneurs.

 

As the founder and director of a consultancy firm, an advisor for a private investment company, a strategic planning, and financial modeling & valuation specialist in the enterprise business, she has put her ideas to the test with dozens of newly formed partnerships and companies. Through her own initiatives, networks and enterprising influence, she has consulted countless businesses and helped various startups into achieving their dreams.

 

When starting a new business, an entrepreneur's ultimate goal is to show that it can generate revenue. The company has proven itself when the developed product or service is a solution that clients require and utilise. This book will not only illustrate but also explain how startups and entrepreneurs may overcome significant uncertainty by prioritising important tasks, and raising sufficient fund for continuous growth of their startup ventures.

 

Entrepreneurs have lofty goals but setting up a business for success needs foresight. Being reactive may lead to problems with clients or employees, as well as divert attention away from the ultimate goal of increasing productivity and revenues. Don't sweat the little stuff when it comes to matters that are beyond your control and have an impact on areas that you can influence. A lack of preparation might result in future problems that can bankrupt a business. For instance, failing to manage HR issues consistently may end in a lawsuit, whereas hiring a HR consultant may have completely avoided this predicament. Similarly, in the startup sector, collecting the appropriate and accurate information from verified sources and relevant personnel is critical to attaining startup goals; in this case, acquiring proper, adequate funding and establishing long-term sustainability, as well as thriving and prospering.

 

Instead of sophisticated business strategies, this book will indicate a framework for startups to explore, analyse, and adjust their strategies in a continuous improvement cycle. Thus, the business model that the team advocates here, is a novel approach to new product/service creation, with an emphasis on quick iteration, consumer insights, creative vision, and tremendous ambition all at the same time.

• Language: English
• Publisher: Fiesta Communications (M) Sdn Bhd
• Release date: Apr 13, 2022
• ISBN: 9786299662105

Book preview

Kenji's analytical perspectives, along with personal experience and verified examples, culminate in a compelling and in-depth grasp of the definition of startups and the stages that a business will go through. She also provides insights and advise on what entrepreneurs should do to be successful. Definitely a must-read for anybody looking to have a thorough knowledge of the startup industry.

-      Dr. KS See,

Founder of Whoosh Media (M) S/B

Although the text is brief, it is dense with useful advice and corporate examples. A good book to read after a long day at work!

-      Dr. Norzayana Yusof,

Lecturer of Segi University

I was very impressed with Kenji when she told me about her startup experience. In this book, 'What Matters in Startup Valuation,' she shares her thoughts, as well as those of venture capitalists, backed up by academic studies, on how to develop a scalable business that can address a real societal need. Kenji has written a book that you will want to share with all of the entrepreneurs around you! This book educates entrepreneurs and business owners how to methodically build and expand their businesses while fearlessly following their aspirations!"

-       Dr. Abdolhossein Zameni (Pejman),

Lecturer of Segi University

A comprehensive resource chock-full of useful information for businesses who have begun their fund-raising journey. Finally, a book on startup valuation that goes beyond the traditional concentration on sales and profit margins. We are reminded that a successful company is about more than just statistics; it is about people, innovation, and how we cope with market shifts.

Dr. Kenji has written a must-read primer for anybody thinking about embarking on a fund-raising journey. Read this book if you want to learn from one the best.

-      Calvin Chong,

Founder of Pitch Technology (M) S/B

Kenji's book serves as a beacon of hope for new startups, helping them in discovering and unravelling the journey, as well as envisioning their pathways to producing value and profit. As an ardent investor herself, she offered advice on traversing the valley of death and avoiding the consequences of bad business decisions.

A must-read for would-be unicorns!

-      Ilham Sunhaji, Head of Corporate Strategy & Research, Oil & Gas Industry, and Director on the Boards of 2 Public Listed Companies

A divinely inspired book that arrived just as I was about to begin on my entrepreneurial path. This is a must-read for any prospective entrepreneur at any level of their business's life cycle.

-      Iqbal Abd Ghaffar, Head of Corporate Strategy

for an Entrepreneur Development Agency

It took me several years of struggle, hardship, failures and successes to fully comprehend what is contained in this magnificent book. While reading it, it reminded me of the significance of fundamentals. I highly recommend startup entrepreneurs to read this book; the experience shared by Dr. Kenji will enhance your thinking and perception, making your entrepreneurial journey a smoother path towards success.

Knowledge informs you on how to do something, experience tells you how to do it proper, and timing tells you when.

Enjoy the journey in your entrepreneurial adventure.

- Rex Yeap, Serial Entrepreneur

What Matters in Startup Valuation is more than a marvel of a book about how to evaluate a startup; it also describes the path and techniques that a startup entrepreneur must have. A startup entrepreneur is a visionary, a dreamer who dares to bet against the odds with their visions, actions, and determination to never give up.

I adore the expression disrupt the market, and a business may certainly become the industry's dark horse if they play the unexpected cards. Each level has its own set of regulations, and in order to obtain access to them, we require external assistance in a variety of ways. However, the value of each successful delivery remains internal, with a strong core team.

-      Stan Lee,

Managing Director of Skydrive Solutions S/B

One of the most fascinating business books I've ever read is 'What Matters in Startup Valuation.' The visual drawings and examples given are just perfect. This is not another 'meh' book; it is a no-nonsense, straight-to-the-point enlightening book.

Dr. Kenji Ng is not your run-of-the-mill book author. In her book, Kenji writes, you don't have to follow the rules all of the time, no matter how clichéd they may sound. It is often necessary to be a little unusual or different in order to get momentum.

-      Yuki Chong,

Managing Partner of a multidisciplinary law firm

A captivating book that tells it all, a must-read for anyone seeking honest and direct information about what a 'startup' is, and how it differs from entrepreneurship. Dr. Kenji Ng's What Matters in Startup Valuation gives a clear perspective on how to begin and traverse the expectations that the journey has set forth.

-      Dr. Patrick Hoh,

Asia Pacific Business Practitioner

Dr. Kenji Ng provides valuable insights from A-Z in What Matters in Startup Valuation for startups like us. This book is a must-read for all aspiring and new entrepreneurs. So many things were previously unknown to us!

-      YY Tan,

Founder of Legalite Solutions (M) S/B

If you are looking for an interesting and motivating strategy to instill values in your company, this is a must-read. Everyone believes their startups are worth billions of dollars, but none of them has provided concrete values and justifications. It actually assists us, as investors, in understanding the significance of business valuation as an investing consideration in all transactions. Read this book to learn how to properly value your startups!

-      Jacob Hooi,

Managing Director of Easy Invest Malaysia

Comprehensive, Precise, and Easy to Understand. What Matters in Startup Valuation is a must-read book for all startup founders, in which Dr. Kenji, an experienced industry expert, shares vital ideas and years of research in this book

-      Yeo Shu Pin,

Senior Partner of a multidisciplinary law firm

WHAT MATTERS IN

STARTUP VALUATION

The Definitive Guide to Taking Your Business to the Next Level

Copyright © 2022 by Dr. Kenji Ng

All rights reserved. No parts of this book may be reproduced in any form or by any electronics means including or mechanical means including information storage and retrieval systems – except in the case of brief quotations embodied in critical articles or reviews – without permission in writing from its publisher.

This publication is designed to provide accurate and authoritative information concerning the subject matter covered. It contains references and information about various organizations’ business activities, corporate decision makers and commercial preferences. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance required, the services of a competent professional person should be sought. This publication is not endorsed by or affiliated with any brands, products and services whatsoever. All trademarks, service marks and copyrights are property of theirs.

Published by Fiesta Communications (M) Sdn Bhd

Cover and internal design © 2022 by Tracy T.

Printed and bound in Malaysia.

Startup valuation is a

tally of hard work

multiples with

no excuses.

- Kenji Ng

Content

FOREWORD

AUTHOR’S NOTE

PROLOGUE

CHAPTER 1

WHAT IS STARTUP

CHAPTER 2

SO, I’M A STARTUP; WHAT STAGE AM I IN?

CHAPTER 3

STARTUP WITH LOW TO ZERO TRACTION

CHAPTER 4

STARTUP VALUATION

CHAPTER 5

FUND RAISING PROCESS – STAGES

CHAPTER 6

WHERE DO YOU FIND THE MONEY?

CHAPTER 7

SWOT ANALYSIS

CHAPTER 8

VALUATION

CHAPTER 9

WHAT STARTUPS MUST DO

CHAPTER 10

WHAT STARTUPS MUST HAVE

CHAPTER 11

CASE STUDIES

BONUS CHAPTER

STARTUPS IN THE AGE OF COVID-19

ABOUT THE AUTHOR

FOREWORD

Since 2019, I have had the pleasure of knowing Kenji Ng in a friendship that has progressed beyond ordinary acquaintance to research collaboration. Since she enrolled in her Doctor of Business Administration program in 2018, I have been following her progress as an entrepreneur as she strives to establish herself as a researcher entrepreneur. Therefore, when Kenji mentioned her desire to write a book to share her expertise on startup valuation, I was intrigued but not surprised.

Kenji had a couple careers' worth of experience in the driver's seat as an executive and entrepreneur when I met her. She is a competent operator who understands her profession and how to manage her portfolio. She has assisted entrepreneurs, venture capitalists, and conglomerates investing in businesses at various stages, from high-level value indications to deep dive analyses.

She has extensive industry understanding in technology, finance, biotechnology, pharmaceuticals, equipment manufacturing, and other prevalent startup companies. She assists her clients in better understanding the potential and dangers connected with a venture, allowing them to make more informed decisions.

Kenji leads you through the startup valuation approach and fund-raising procedure in this book. She discusses common issues that occur while valuing companies, such as:

-      What is a startup?

-      How do startups work?

-      Which methodology should be used to properly capture the value potential of a startup?

-      How do the funding stages or series work?

Startup problems are both challenging and intriguing. This book is useful for assisting startups in getting their head in the game. Enjoy the reading, and best of luck with your business adventure.

Chong Wei Ying, PhD

Associate Professor

School of Management and Marketing

Faculty of Business and Law

Taylor’s University, Malaysia

6 April 2022

AUTHOR’S NOTE

I am the Founder and Managing Director of Black Arm Sdn Bhd, a company that provides services to startup entrepreneurs in the ASEAN region. I have 20 years of executive experience in general management, software development, product management, strategic marketing, business development, and financial modelling & valuation analysis.

As a business owner, mentor, and angel investor myself, I am currently in give-back mode. My experience with investors and startups includes working as an adviser at a private investment firm, where I scrutinised the evaluation process and advised the investment committee on potentials and dangers prior to investing.

"What Matters in Startup Valuation" is the title of my first book here.

I specialise in consulting and guiding small and medium-sized businesses in reaching their aspirations, business objectives, and possibilities. I consult a wide spectrum of C-level clients from a number of industries, including FMCG, services, automotive, oil and gas, real estate, technology and engineering. My career began as an Assistant Civil Engineer with a strong technical background in civil engineering, focused on paperwork rather than social networking. Due to the sheer compelling opportunities for advancement, my work path began to take a turn toward business development and finance. I recently earned my Doctorate in Business Administration, with my research emphasizing on startup valuation. I am motivated to continue my research on this topic and share my findings to reduce the gap between investors and startups.

PROLOGUE

This prologue explains why valuing a startup is difficult, and why it is worth what investors are prepared to risk, in comparison to the typical valuation of a mature or profitable corporation, based on Earnings Before Interest and Taxes (EBIT) OR Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).

I am frequently asked by startup founders, the majority of