‘The basic valuation principles always hold’
Recently, we had occasion to listen to Thyagesh Baba, the infectiously brisk director of Spark Capital, when he spoke rapidly about a variety of topics — ranging from the innards of his industry to the attributes of the right entrepreneur, from the tales of financial tsunami to his dream of owning a private jet — during lunch at Business Line.
For instance, we asked Baba, as we called him, “What are the tools for business valuation that are hot these days, and what are the tools that have fallen by the way side?”
Basic valuation principles always hold — multiples of cash, earnings, book/asset value, he said. “The ‘in flavour’ performance parameters that drive these valuation metrics — growth, RoE, ‘eyeballs’, among others — have kept changing to suit situations and specific industries,” he added.