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Rishi Chavan

Ignoramus • 2m

Can anyone please explain the term "Valuation" as seen on Shark Tank to me like a 5 year old?

Havish Gupta

Figuring Out • 2m

valuation means if you sell your company, how much money you will get. so imagine if i want your sinchan pillow, will you give it to me for free? absolutely no.. but what if i i offer you 2, 3 or 4 daily milk for it. Will you accept the deal? maybe. same happens with Companies. if you want to purchase a company, you will have to pay a certain amount and that amount is exactly what we call valuation. Each company would have different valuation depending on it's business, hype and the investor. This is similar to how you would like Sinchan so you would demand more choclates for it, while someone else who likes more of doremon and less of sinchan would be ready to give his Sinchan pillow for less.

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