Mon, 6 June 2022
How to Improve Your Valuation
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
Valuation is a negotiation and not just a formula.
Here are some key points to improve your valuation:
Highlight the team and their contributions to the business.
The team is often no more than one slide in the deck and rarely does their value come across to investors aside from that of the CEO.
Discuss what each team member is doing to make the business successful.
Show previous business successes.
Demonstrate past accomplishments of the team, in particular exits.
Highlight milestones accomplished so far in the business.
Most fundraises kick off with a successfully completed milestone such as launching the product.
Focus on milestones that show value to the business such as new hires for the team, closing a key customer, or finding a lead investor.
Reduce your burn rate.
This shows you can sustain longer with less funding.
In fact, if you can move the business to profitability then your company will be more attractive as it can survive market downturns.
Let the investors propose the valuation and consider the one which gives you the best deal.
Valuation is a negotiation which means everything counts.
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