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  • Writer's pictureArnab Sinha

Novonanmek's Valuation

Oscar Wilde's Short Story "The Model Millionaire" starts with the phrase "Romance is the privilege of the rich, not the profession of the unemployed. The poor should be practical and prosaic. It is better to have a permanent income than to be fascinating."

I have been hearing a similar phrase since a very long time "Valuation is the privilege of the Investors, not the profession of the founder.....".

My point is "Should the founder not be given a chance to set a value for his own startup?"

By its very nature, valuation is not an exact science and it becomes even more obvious in case of startups. Startups which are generally pre-revenue, pre-poc, the traditional approaches to valuation are not applicable, which makes the valuation of the startup difficult and vague.

In case of Direct-Air-Capture (DAC) Startups, the recent exit of Carbon Engineering, a 15 year old Canada based company at USD 1.1 Billion has given us a great benchmark that can be used to value "similar startups" in the DAC space.

I have worked the valuation of Novonanmek, (link to the paper is below) since it is a similar startup in the DAC space using the 'exit valuation of Carbon Engineering as a benchmark'.

a-historical-exit-based-cash-flow-approach-to-valuing-pre-revenue-direct-air-capture-dac-s
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The paper: "Sinha, A. (2023). A Historical Exit-Based Cash Flow Approach to Valuing pre-revenue Direct-Air-Capture (DAC) Start-Ups. Cambridge Open Engage. doi:10.33774/coe-2023-0mrmp" can be found in the link: DOI: https://lnkd.in/d_AJv8Qi


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