A negotiated round price is not the same as a valuation. Investors set a price; a valuation explains what the business is worth and why. Valtech Valuation provides independent startup and pre-IPO valuation in Hong Kong for founders, venture and private equity funds, family offices and companies preparing to list – including allocation of value across preferred and ordinary share classes.
When Startups and Funds Need an Independent Valuation
- Fundraising – a defensible reference point for founders and comfort for investors that the price is grounded in analysis.
- Share-based payments – option and award grants need an ordinary share value under HKFRS 2, which is not the preferred share price paid in the round.
- Fund reporting – VC and PE funds marking portfolio holdings, often quarterly, under HKFRS 13 and IPEV guidelines.
- Pre-IPO restructuring – measuring historical share issuances, option grants and group reorganisations, sometimes years after the event.
- Secondaries and internal transfers – founder or employee share sales that must not be challenged later by tax authorities or new investors.
Valuation Methods for Early-Stage Companies
- Backsolve (calibration) – infers total equity value from what investors paid in a recent arm's-length round.
- Option pricing model (OPM) – allocates equity value across share classes with different liquidation preferences, participation and conversion rights.
- Probability-weighted expected return (PWERM) – weights discrete exit scenarios such as IPO, trade sale or liquidation; common closer to a listing.
- Monte Carlo simulation – for complex waterfalls and anti-dilution ratchets.
- Market approach – revenue or user multiples where genuine comparables exist.
- Milestone / risk-adjusted DCF – for biotech and deep tech, where value depends on technical or regulatory milestones.
Preferred shares are worth more than ordinary shares. If your Series A priced preferred shares at HK$10, your ordinary shares are not worth HK$10. Liquidation preferences, participation and conversion terms give each class different economics. Granting options at the preferred price generally overstates the ordinary share value and has to be corrected later – usually at audit or during IPO preparation.
What Information Matters
A longer business plan is not more useful than a short one. What carries weight is the team's track record, a clear business model, evidence of traction, a realistic expansion plan and a specific budget for the funds raised. The full cap table matters as much as the forecast – every share class with its preference, participation, conversion and anti-dilution terms, the option pool and any convertibles, supported by term sheets and articles.
Sector Experience
Our team has valued technology, biotech and life science, blockchain and digital asset companies, SaaS businesses and university-led science and technology projects – including pre-revenue companies and startups in Hong Kong Science Park programmes.
Frequently Asked Questions
Can you value a pre-revenue company?
Yes – routinely. We rely on the latest priced round, comparable transactions, milestone or scenario analysis, or a risk-adjusted forecast.
Do you provide 409A valuations for a Hong Kong company with US investors?
Yes. Where a Hong Kong or Cayman holding company has US taxpayers holding options, we prepare 409A-style valuations alongside or in addition to HKFRS 2 work.
How often do funds need portfolio valuations?
Most mark quarterly or semi-annually. Once the framework is set up, later periods are faster because the methodology and comparables are updated rather than rebuilt.
Why Founders and Funds Choose Valtech
Startup valuations are read by auditors, sponsors, the Stock Exchange at IPO, and often by international venture investors and limited partners. They need a valuer every one of those readers will respect.
- A strong team with outstanding international credentials – CPA, CFA, FRM, MRICS, ABV (AICPA) and China Certified Public Valuer qualifications gained in Hong Kong, the United States, the United Kingdom and Mainland China. When your valuation is reviewed by authorities, auditors and international investors, these credentials carry weight.
- Senior members closely monitor every valuation – a director personally works through your cap table and signs the report. Your concerns are addressed by an experienced professional who has supported many fundraisings and pre-IPO restructurings.
- Quantitative capability in-house – OPM, PWERM and Monte Carlo waterfalls are built and run by our own team.
- ISO 9001 certified quality management – defined review steps before any report is released.
- Reasonable fees, technical depth – fixed scope and fee agreed upfront, sized to a startup's needs.
Request a Startup Valuation Quotation
Tell us your latest funding round, the share classes in issue and the purpose of the valuation. A director-level valuer will reply with scope, fee and turnaround. Call +852 2388 9262 or email admin@valtech-valuation.com.
More detail: Startup & pre-IPO valuation – Valtech Hong Kong
Valtech Valuation Advisory Ltd, Unit 2106, 21/F, Futura Plaza, 111-113 How Ming Street, Kwun Tong, Kowloon, Hong Kong. This article is general information, not valuation, accounting, tax or legal advice for any specific entity.