Introduction

When you raise capital or prepare for an exit, valuation becomes one of the most sensitive topics. Many entrepreneurs have a number in mind for their company’s worth, but often it is far from reality. Valuation is not a magic formula, nor is it just about numbers. It is a mix of methods, market dynamics, psychology, and negotiation. Getting it right is critical. Too high and you risk a down round later. Too low and you give away more equity than necessary. So, is valuation a science or an art? The truth is, it is both.

At dups, we help entrepreneurs turn assumptions into strategy, so they can defend their value with confidence and negotiate from a position of strength.

3 truths about valuation

Truth 1: Valuation is not an exact science

Methods like multiples, discounted cash flow (DCF), and comparables give you a range, not an absolute truth. Each approach has its limits, and the earlier your stage, the wider the gap. That is why valuation is as much about positioning and negotiation as it is about numbers.

Truth 2: The market decides

The real value of your company is what a buyer or investor is willing to pay. This depends on strategic fit, timing, and competitive context. Two identical businesses can have very different valuations based on who is sitting across the table and what they need.

Truth 3: Preparation boosts value

Valuation is not just about financial models, it is about perception. Anticipate investor questions, structure your accounts, resolve governance issues, and prepare a clean cap table. These steps increase confidence and perceived value, which can make a significant difference in negotiations.

Different valuation methods

Entrepreneurs often ask for a single number, but valuation is a range built on different approaches. Here are the most common methods:

• Accepted Dilution

The simplest route, not a real valuation method, often chosen when financial projections are still a guess. Entrepreneurs decide what percentage of equity they are willing to give up for the amount they want to raise or on the other hand, what ownership percentage should be left in the founders hands to be in a good position for the next round?  It’s quick and easy, but imprecise and leaves little room for negotiation or justification. Take a look at our article around dilution for more information Equity dilution explained: understanding share dilution in fundraising — Dups

• Multiples

This method compares your company to similar businesses using ratios like EV/Revenue or EV/EBITDA. It’s fast and reflects market sentiment, but finding true comparables is tricky. Adjustments for size, margins, or liquidity are common, and unique strengths or risks may not be captured.

• The VC Method

This method is intended for venture capital investors to be used in conjunction with other approaches, ensuring the calculated valuation meets expected returns. The technique estimates potential future exit value and applies a significant discount rate, typically 30%, to account for risk. It aligns with common VC metrics such as IRR (Internal Rate of Return), which evaluates investment returns while considering time. However, this approach relies on assumptions regarding exit scenarios and does not account for current market conditions.

• Discounted Cash Flow (DCF)

DCF calculates the present value of projected future cash flows. It’s detailed and works well for later-stage companies with predictable revenues. However, it’s labour-intensive, highly sensitive to assumptions, and can create a false sense of precision for early-stage businesses.

Factors that influence value: beyond the numbers

Valuation is not just about financial statements. Buyers and investors look at the bigger picture. Key factors include:

- Growth Trajectory: Strong historical growth and clear scalability command a premium.

- Recurring Revenue: Predictable income streams reduce risk and increase value.

- Customer Concentration: Heavy reliance on one client is a red flag.

- Intellectual Property: Patents and proprietary technology add strategic value.

- Management Team Strength: Investors pay for leadership as much as for assets.

- Cultural Fit: For strategic buyers, alignment in values and operations can justify paying more.

At dups, we help entrepreneurs identify these value drivers and address weaknesses before going to market. This preparation is not cosmetic, it is strategic. It can add millions to your final price.

Why price is more than math

Let’s not forget that valuation does not mean price.

Price is shaped by:

- Market sentiment: Investor appetite and sector trends.

- Your equity story: How compelling your vision and growth plan are.

- Negotiation dynamics: Who leads the round and how much FOMO (FEAR OF MISSING OUT) you have built.

- Numbers matter, but they do not speak for themselves. Investors buy confidence, not spreadsheets.

What impact do storytelling and narrative have on perceived value?

Numbers alone do not sell a deal. The way you frame your equity story (your vision, team, market opportunity, and growth plan) can elevate perceived value far beyond what spreadsheets suggest. A compelling narrative helps investors see not just what your company is today, but what it could become. This is where valuation becomes an art: founders who communicate ambition, clarity, and momentum often secure higher valuations, even if their metrics are similar to peers. Your story should answer “why now?” and “why you?” in a way that resonates emotionally and strategically.

How do negotiation dynamics and competitive tension shape the final valuation?

Valuation is rarely set in isolation. The presence of multiple interested investors can dramatically shift the outcome. When you create competitive tension, by running a structured process, engaging several potential leads, and building FOMO (Fear of Missing Out), investors may be willing to stretch their valuation assumptions. This dynamic is especially powerful in Belgium’s relationship-driven market, where exclusivity and timing matter. The art lies in orchestrating the process so that investors feel urgency, but not pressure, and you retain leverage throughout negotiations.

How to prepare for valuation talks

Before you enter negotiations:

- Choose the right valuation method for your stage.

- Benchmark against recent deals, but adapt to your reality.

- Prepare answers for tough investor questions: Why this number? Why now?

- Don’t hesitate to model dilution impact for future rounds, so you do not lose control.

Why advisory matters

Good advisory means objectifying, justifying, and defending your valuation. At dups, we combine financial and legal expertise under one roof to help entrepreneurs navigate fundraising and M&A with clarity and discipline. We deliver pragmatic support, tailored to your reality, with clear deliverables and timelines.

Our boutique model means we work with a select number of companies per year, ensuring full attention and speed. With our network of Belgian investors and European funds, we help you attract the right buyers or investors and negotiate from a position of strength.

Conclusion

Valuation sits at the crossroads of logic and intuition. While financial models and market benchmarks provide some kind of scientific foundation, the final number is always shaped by human factors such as negotiation, storytelling, and the psychology of both founders and investors. The art lies in how you position your company, build competitive tension, and communicate your vision. The science ensures you have credible, defensible numbers and a clear understanding of dilution and future rounds.

Getting valuation right is about more than just avoiding mistakes; it’s about protecting your long-term interests and setting your company up for sustainable growth. A well-defended valuation strengthens your negotiating position, attracts the right investors, and preserves your ability to execute your strategy. Conversely, a poorly chosen valuation can lead to painful down rounds, loss of control, and missed opportunities.

Ready to defend your valuation?

Download The Founder’s Guide to Fundraising in Belgium and learn:

- How to choose the right valuation method for your stage.

- How to avoid over- or under-valuing your company.

- How to prepare for investor negotiations with confidence.

Download the full guide now and raise on your own terms.

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