Valuation

A valuation is an estimate of how much a business is worth in money terms, whether for raising investment, selling or simply tracking progress. It can be based on profits, assets, sales or what similar businesses have sold for, and different methods can give quite different answers.

It is like getting a house appraised: informed opinion rather than a fixed fact, and the real figure is only settled when someone actually pays. A valuation matters because it decides how much of a company an investor gets for their money, so founders and backers often negotiate it hard.