SEED CAPITAL FINANCING VALUATION OF DATA ANALYST STARTUP

• Main Author: Rismadhanti, Regita
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/40972
• Institution: Institut Teknologi Bandung

The growth of retail industry in Indonesia recently shows a significant improvement based on survey from Bank Indonesia and Indonesian Retailers Association (APRINDO). Warung is one of retail types in Indonesia and most of them belong to micro small medium enterprises (MSME). They face problems related with long distribution channel, managing inventories, and organizing chaotic accounting. A Start-up in seed stage only has prototype and lack of financial record because it has not generate any revenue yet. S-MART as a start-up founded in 2018 that tries to help warung managing the stocks, shorten the distribution channels and organizing the financial record and stocks ordered through digital platform for warung so that they will have a competitive advantage. This study aims to help S-MART estimate the enterprise value in order to be a bargaining power in the attempt to look for capital and the suitable source of financing for them. This study uses two valuation methods which are Berkus and Scorecard methods. The data collected was from the interview with the CEO of S-MART, SMART’s investors intended, and find the similar start-up financing deals as comparable data. The results show Berkus method generates USD1,526,500 valuation and Scorecard method shows USD 1,333,240. For a seed stage start-up like S-MART, Berkus and Scorecard are more preferable due to the absence of financial records that makes it difficult to determine the right input factors such as growth rates, cost of capital, and other fundamental financial assumptions for estimating future financial projections. The most appropriate funding source for S-MART are angel investors or venture capital who usually have an interest in financing risky early-stage businesses that require large amounts of capital for their development. S-MART has already generated solid idea and validated it. The team are suggested to work full team and focus on growing the business and the most important thing is they have to execute their plan soon with a clear strategy and planning