Valuing a startup is tricky, especially when it hasn’t earned a cent. There are no profits. No customers. No track record.
But that doesn’t mean you avoid valuation. In fact, getting it right at the beginning might be the most important step of all.
In this article, I’ll walk you through how we valued Dalmilling Capital, a holding company we’ve been building from the ground up. We’ll cover:
How we decided on share count and price
The exact method and formulas we used
What the valuation tells us going forward
Step 1: Set a Philosophy Before Setting a Price
Before touching a spreadsheet, we made a philosophical decision: We would not value our company based on potential.
Why?
Because most early-stage valuations are inflated, using projections that rarely materialise. That’s not how we should operate, and it’s not how we want to think.
So instead, we anchored our valuation in tangible contributions, the capital that had actually been raised and was sitting in the bank.
Step 2: Start With Book Value
Our actual cash raised: $1,000
That became our initial book value.
No goodwill. No intangibles. No IP premiums. Just clean, contributed capital.
We then divided the company into 10,000 shares, which made the per-share value:Share Price=1,00010,000=$0.10 per shareShare Price=10,0001,000=$0.10 per share
This gave us a clear and simple cap table:
Shareholder
Shares Held
Ownership %
Contribution
Founder
10,000
100%
$1,000
It’s not complex and that’s the point. Anyone looking at this can understand where the number comes from.
Why 10,000 Shares?
We picked 10,000 shares for simplicity. It creates a nice balance:
Small enough to keep it human
Large enough to allow for fractional ownership later
Easy mental math: every share = 0.01% of the company
You could use 1,000 or 100,000. What matters is consistency and clarity.
Step 3: Build Value Through Operations, Not Assumptions
At this point, the valuation is not based on revenue or earnings. It’s purely equity-based.
That means our future growth in valuation will have to come from:
Deploying capital into high-quality public equities
Later, acquiring or investing in small businesses with strong cash flow
Retained earnings and reinvestment.
We won’t revalue the company until we’ve earned a revaluation.
Intrinsic Value Model (Once We Have Cash Flows)
Eventually, as Dalmilling begins generating cash flow, we’ll use a Discounted Cash Flow (DCF) model just as we would do for our portfolio companies.
Here’s a preview of what that would look like:
Intrinsic Value = ∑ (FCFt / (1 + r)^t) + (Terminal Value / (1 + r)^n)
Where:
FCF = Free Cash Flow
r = Discount rate (e.g., 10%)
n = Final year in model (e.g., 5)
Terminal Value = FCF in year 5 × (1 + g) / (r – g)
But again that only comes into play when we’re a real operating business with cash flow.
Summary of Our Startup Valuation
Metric
Value
Capital Raised
$1,000
Number of Shares
10,000
Price per Share
$0.10
Book Value
$1,000
Intrinsic Value
TBD
Revaluation Conditions
Only after earnings or acquisitions
We want each dollar of shareholder capital to feel sacred. That means no games, no hype, no inflated dreams.
With that out of the way, I have a ten year vision for this company, which I will discuss more in my next letters. Since you are reading, you fellow reader, are in fact a partner.
That means your vision is aligned with mine and we are on this journey together. For that reason, it is no longer I, rather we.
We are not in a rush. We are not trying to impress anyone. We are building something that can last.
2. Before numbers, we start with our core beliefs:
• We are not traders, hedge funds or investment vehicles.
• We think in decades, not quarters
• We reinvest all capital until we can produce sustainable returns
• We value simplicity, patience, and discipline over scale or speed.
• We only act when we understand what we’re doing.
We do not borrow money. We do not chase themes. And we do not measure ourselves by activity.
These principles are non-negotiable. They keep us from doing stupid things, especially when it gets noisy.
Year in Review
1. Capital Base
We began the year with permanent capital contributed solely by the founder. There are no external partners limited by shares, no redemption rights, and no exit timelines.
This structure gives us the rarest asset in investing: freedom to wait.
As of 30 June 2025, our capital base remains fully intact, with no investments made.
We are in no hurry to move.
2. First Steps in Public Markets
We conducted early-stage research into two ASX-listed businesses that meet our standards. These are steady, profitable operators in essential sectors. We have not yet taken a position, but they remain under active review.
We filtered opportunities through our guiding principles, prioritised quality over speed, and showed good judgement in walking away when conviction wasn’t there.
3. Private Company Diligence
We spent time meeting owners of small to midsize businesses in our target sectors to better understand what they do. Due to our limited capital, we were not looking to acquire any business, but it is prudent to understand what the business undertaking is.
We engaged deeply with two potential sellers. In both cases, we walked away. Not because the businesses were bad, but because they were not right for us.
We are not looking for activity. We are looking for lifelong alignment.
How We Think About Results
We do not report quarterly returns as there are no benchmarks here. We judge ourselves by a few clear questions:
• Are we staying within our circle of competence?
• Are we walking away more than we are saying yes?
• Are the people we want to work with now taking our calls?
• Are we building trust through how we operate?
By these measures, we are where we hoped to be after year one, albeit we are not in any position to satisfy any of those questions at the time of writing!
Looking Ahead
The next 12 months will be similar. We plan to:
• Consistently network with SME accountants and small business restructuring professionals
• Track and study public companies we would be proud to own a part of
• Maintain a lean and disciplined operation
• Deploy capital only when clarity, quality, and price align
Appendix: Disclosures and Financial Notes
As of 30 June 2025
1. Capital Base
Dalmilling Capital is privately held. The capital base remains fully intact and unencumbered. No capital has been deployed during the financial year.
Initial funding was contributed solely by the founder. There are no outside investors, financial obligations, or redemption rights. We do not use debt.
2. Investments
No positions were taken during this period. We are actively researching opportunities in two categories:
• Public companies listed on the ASX that are profitable, simple, and financially stable
• Private businesses in essential sectors with strong operators and succession potential
Our process is patient and focused and we will move only when we understand the business and are comfortable with the people behind it.
Item
Summary
Total Capital Raised
1000
Shares Issued
10000
Estimated Intrinsic Value
7800
Value per Share
0.78
Dividend Declared
0
Net Income
0
Operating Expenses
354
Investments Made
0
3. Operating Expenses
Expenses were minimal and self-funded. These included:
• Legal and structural setup
• Travel for site visits and relationship building
• Research and diligence expenses related to potential investments
We do not pay salaries, fees, or bonuses. All costs are reviewed with owner’s discipline.
4. Ownership Table (Cap Table)
5. Reporting Practices
We do not report unrealised changes in value or theoretical returns. Only realised gains, retained earnings, and dividends will be reflected in future reports.
Once capital is deployed, we will include company-level commentary to explain the “why” behind each position.
6. Positions & Asset Activity (Year to Date)
7. Financial Summary
Balance Sheet (as of 30 June 2025):
Shareholder Shares % Ownership Value ($)
Dalmilling Founder 10000 100 7800
Total 10000 100 7800
Position Type Date Amount Notes
– – – – No activity yet (capital held)
Item Amount ($)
Cash & Equivalents 1000
Investments 0
Liabilities 0
Equity (Book) 1000
Estimated Intrinsic Value 7800
Closing Thoughts
We are building Dalmilling slowly and deliberately. That is not by default, it is by design.
There is no glamour in holding cash, passing on deals, or turning down growth for its own sake. But there is great value in doing the right thing at the right time, and waiting when the time is not yet right.
We are grateful to be on this path. And more grateful still that you are walking it with us.
Dalmilling Capital 