Is The Valuation Algorithm Accurate?

In the end, business value is in the eye of the beholder, and our estimate will only be as accurate as the business owner is at self-reporting estimates. In a test of our algorithm, 55K+ companies of $700k - $5 million in revenue were valued using our algorithm and Value Builder Score assessment and compared to the companies’ actual sales and formal business valuation data. Our new algorithm was found to have an average variance of 24% to both the BV and Sale Data; in comparison, our old algorithm was off by an average of 45% (a 50% reduction with the new algorithm). Most differences in final price were attributed to data only found by a deep dive into a company’s books or assets being accounted for.