What Should Investors Look for to Avoid Overvaluation?
Investors can protect themselves from overvaluation by:
1. Due Diligence: Conduct thorough due diligence on the startup's financials, market potential, and competitive landscape.
2. Skepticism of Hype: Be cautious of market hype and media influence. Focus on the startup's intrinsic value rather than external noise.
3. Valuation Metrics: Utilize various valuation metrics, such as price-to-earnings ratio, price-to-sales ratio, and discounted cash flow analysis, to assess the company's worth.
4. Past Performance: Evaluate the startup's past performance and growth trajectory to gauge its future potential realistically.