Subject
- #Practical Experience
- #Startup
- #AI Answer
- #Valuation
- #ChatGPT
ChatGPT vs. Accountant, Real-time Verification of Startup Enterprise Value Evaluation AI Answers
Hello, this is Changui Accounting Firm. Recently, AI tools including ChatGPT have been providing advice on startup enterprise value evaluation. However, from the perspective of experienced professional accountants, there are some shortcomings in the AI's answers, and we would like to supplement them.
The strengths of ChatGPT are that it systematically presents general valuation theories and methodologies, provides comprehensive explanations of various evaluation methods, and organizes information in an accessible form. However, from an expert's perspective, the areas that need to be supplemented include the subtle nuances and negotiation points in the actual investment field, specific application methods reflecting the characteristics of each industry and stage, and realistic advice considering the latest investment trends and market conditions.
The theoretical framework presented by ChatGPT is very useful, but in actual VC meetings or M&A negotiations, the following practical considerations are more important. When setting benchmarking companies, AI presents general methodologies, but in reality, investors prefer different benchmarking methods, and sometimes suggest comparison companies from angles that founders have not considered. Even when applying multiples, the theoretical range is correct, but in practice, qualitative factors such as the team's experience, market entry barriers, and competitor trends often have a greater impact on the determination of multiples.
As a result of a practical expert actually conducting Q&A with ChatGPT, the AI did not lie overall and accurately presented basic theories and methodologies. In particular, the explanations of valuation methodologies such as the scorecard method and the Berkhouse method, as well as the core factors that VCs pay attention to, were very useful. However, the AI tried to explain things in too much detail, so there were some potentially misleading contents. For example, it mentioned a specific price range, presenting multiples of 5 to 15 times for mobile app services, but these figures should only be considered as reference information.
The most disappointing part of the AI's answers was the consideration of practical constraints. For example, in the case of sole proprietors, unlike incorporated businesses, the M&A process is much more complicated because it must be done through the business transfer method, not the stock transfer, and in the case of early-stage startups, it is more realistic to consider attracting investment first rather than M&A. These are areas that AI could not fully address.
AI tools like ChatGPT are very useful for initial information gathering and basic concept organization. However, when actually attracting investment or proceeding with M&A, the experience and intuition of experts in the field are also needed.
Through this verification, while acknowledging the usefulness of AI's answers, we would like to say that the role of experts who can supplement the complexities and variables of the practical field is still important. By adding practical experience on top of the basic framework provided by AI, a more accurate and realistic enterprise value evaluation is expected to be possible.
The core conclusion of this verification was that AI did not give wrong opinions to the point of making wrong decisions, but that supplementary advice from experts is needed to obtain enough information for decision-making. For more details, we have summarized them through the YouTube video below.
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