Industry watchers said that a realistic valuation is important for tech startups as potential investors may lose interest if offered an unreasonable price. However, Professor Desai Arcot Narasimhalu, director of the Institute of Innovation and Entrepreneurship at SMU, noted that there are several methods of calculating the value of a company and there is no right or wrong way. He pointed out that the earnings projections made by most founders are too aggressive and investors almost always discount such projections unless the management team is really very experienced within the industry.
ZDNet Asia