Applied Research On Value Driver-based Method Of Evaluating “Internet+” Start-up Company

The madness of Capital Market and high speed of Economic development are two key words of China in the recent years.The exponential-shape increase of the number and amount of merges and acquisitions(M&A)keeps reminding us that the Era of Capital is still developing,and far away from the end.Under the policy navigation of “the Belt and Road Initiatives” as well as “Address Overcapacity,Reduce Inventory,Deleverage,Lower Costs,and Bolster Areas of Weakness”,a continuous increasing number of Chinese capital masters are becoming more and more in favor of international firms,mainly due to their industrial and technological advantages.However,as the key part of M&A,the backward valuation methods as well as technologies are trapping our international M&A speed.It is extremely essential and urgent to improve our valuation methods and technologies.Thus,the author comes up with “Value Driver-based Method” via the research of the current hotspot – the valuation methods of “internet +” startup company.It is the author’s will to enrich the Chinese valuation world,from the perspective of both academic and applied points although the method may not be mature enough at this stage.As a result,Chinese and international valuation worlds are able to share the underlying method which will benefit our international M&A as well as the reputation and competitiveness of Chinese companies.After the research from literature and empirical analysis,the author believes that “Value Driver-based Method” is a valuation method for “internet +” start-up company which combines scientificity and artistry.The idea is to switching the financial multiples into value drivers which are more representative of a companies’ core competitiveness as well as optimizing application processes on base of traditional market approach.The key parts and characteristics of “Value Driver-based Method” are dividing the target companies into two levels – scale and quality levels to evaluate,putting appropriate weights in comparables as well as multiples.Moreover,the author shows the method in detail via a real case where a listed company acquired a logistic firm belonging to the same group.