First thing to understand: your company isn't worth one price. It's worth a range, and where you land in that range depends on the leverage you manage to create. Valuation is as much about process as it is about method.
The three methods everyone uses
1. Comparable multiples
This is the market's common language. You take your key figures (revenue, EBITDA, ARR for SaaS) and apply the multiples seen in comparable deals or listed companies. Simple on the surface, but everything hinges on the choice of comparables: sector, size, growth, profitability, geography. Two analysts acting in good faith can reach very different ranges with the same method.
2. DCF (discounted cash flows)
You discount the future cash flows in your business plan. It's the most rigorous method on paper and the easiest to manipulate in practice: everything depends on the growth assumptions and the discount rate. Its real value in a negotiation: documenting your trajectory and justifying a premium when your comparables undervalue your potential.
3. Previous transactions
Your own history counts. A recent funding round, an offer you received, a deal in your sector: all of these are anchor points. Watch out for the reverse trap: a valuation set too high in the last round can leave you carrying the world on your shoulders in the next one.
What impact changes (and what it doesn't)
Let's be blunt: impact doesn't replace the fundamentals. A buyer or an investor will pay first for your growth, your margins, your recurring revenue and the strength of your team. But real, measured impact works on three very concrete levers:
- A wider pool of buyers. Impact funds, institutional investors with dedicated allocations, corporates looking for ESG credibility: counterparties who wouldn't look at a conventional deal come into the process. More buyers, more competition, a better price.
- Lower perceived risk. ESUS accreditation (France's social-utility enterprise label), a mission written into the articles of association, impact measured with audited KPIs: all of which reassure buyers that the model will last and will hold up under tomorrow's regulation.
- The scarcity premium. In some segments (health, education, the ecological transition), profitable impact assets are rare. And buyers pay for scarcity.
But be careful: impact that is merely claimed, unmeasured and disconnected from the business model is worth nothing in a negotiation. Worse, it raises suspicions of greenwashing and drags out the due diligence.
The classic traps
- Confusing valuation with price. Valuation is the analysis. Price is what one specific buyer agrees to pay on one specific day, with one specific structure. An earn-out, a vendor loan or a liquidation preference can move the real value by 20 to 30% for the same headline “valuation”.
- Anchoring on a number you heard at a party. “A company like yours is worth 10 times ARR”: maybe, in the US, in 2021, with a growth profile you don't have. Letting the market educate you is expensive: better to show up with a documented range.
- Negotiating without an alternative. With only one counterparty at the table, they set the price. Competitive tension is the number one valuation lever, ahead of any financial method.
- Forgetting cash and debt. You negotiate an enterprise value, but you bank an equity value. The net debt and normalised working capital adjustment holds nasty surprises for anyone who only discovers it at the end of the process.
Where to start
Before you talk to anyone, run your own diagnosis. We built Lévaia, a free tool that gives you a first valuation range and a readiness score. It's the right starting point before you launch a process, a raise or a sale.
And if your deal is above €2m, we can look at it together: that's exactly what we do, in M&A as well as in fundraising.
