Valuing an entrepreneurial enterprise
This paper focuses on valuation issues and methods that are related to a closely-held entrepreneurial enterprise. This focus is motivated by the fact that the number of small closely held business start-ups, which we refer to broadly by the term entrepreneurial enterprises, continues to grow year after year, and new business ventures remain the primary source for employment growth in the United States and most industrialized nations. And, the topic of the valuation of an entrepreneurial enterprise has for the most part been ignored. The traditional approaches to the valuation of small closely held entrepreneurial enterprises are, in our view, wanting in a number of important respects. Simply, traditional valuation methods are modeled in a manner that is applicable to a going-concern business with a history of sales and revenues. That is not the case for an entrepreneurial enterprise as we define it, and thus the use of traditional valuation methods is questionable.
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References listed on IDEAS
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- Zoltan Acs & Pamela Mueller, 2008.
"Employment effects of business dynamics: Mice, Gazelles and Elephants,"
Small Business Economics,
Springer, vol. 30(1), pages 85-100, January.
- Zoltan Acs & Pamela Mueller, 2006. "Employment effects of business dynamics: Mice, Gazelles and Elephants," Papers on Entrepreneurship, Growth and Public Policy 2006-23, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
- Audretsch, David B. & Link, Albert N., 2011.
"Valuing an Entrepreneurial Enterprise,"
11-20, University of North Carolina at Greensboro, Department of Economics.
- Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
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