Valuing a Software Company

Valuing a software company requires a thorough understanding of the Company’s past and a reasonable projection of its future cash flows. The costs incurred to create the software should be reviewed and understood. These historical costs are relevant if they reflect the cost of recreating the software today. Management’s experience running a software company should be closely reviewed and used to develop a realistic projection of the Company’s future revenues and expenses. For more information please see our newsletter on valuing a software company.