How Do You Value a Business?

The book is a value equation and the value equation does exist. It's a six variable equation. The idea of a business value is how much would somebody pay for that current return given the risks and growth prospects that your company has. Most companies in America don't end up being worth more than they cost to build. But if you're trying to raise money from institutional investors or sell out to private equity firms, it really helps to have a company that could be worth more than a cost to built.