Variation (Corporate Value)
Fundraising is an essential process for startups to secure funding for their operations and growth. One important aspect of fundraising is understanding the concept of Variation (Corporate Value). The corporate value, also known as the market capitalization, is calculated by multiplying the Current Stock Price by the Total Issued Shares. In other words, if two out of the three variables (current stock price, total issued shares, and corporate value) are known, the third variable can be determined. It is important to note that the stock price for listed companies, also known as Listed Stocks, is publicly available and can be easily observed through platforms like the Nikkei Stock Average. However, for startup companies, also known as Unlisted stocks, the stock price is determined through negotiations between the company and investors. The number of total issued shares is known in advance, so negotiating the stock price is essentially the same as negotiating the corporate value.