This is just a "bit of fun", but I've been wondering about how you value small, rapidly-growing, hitech startups.
Any valuation would have to depend on the startup surviving, because technology has no value without the people to implement it. And, while larger companies are valued at 2x income, accounting for this too strictly seems unfair for a company with few customers, at the very start of its growth phase.
But I think I have a method. Here's an example:
A new startup is getting regular orders, on average one per working day, each of which will earn £100 per month in license income.
I know, from my previous companies, that the customers will stay for 3 years on average
So each day's new orders are really worth £3,600.
Each year's new orders are really worth £900,000 (assuming 250 working days per year)
This value is basically income, albeit deferred a bit
So the company is worth 2x income, i.e. £1,800,000.
This assumes nothing goes wrong with the company, orders continue, prices hold up, and customers stay for 3 years on average - which may be optimistic. Also that growth is linear with no re-investing in sales - which is pessimistic.