GHION.AIVisionary leader in Digital & Transformation, Innovation, and Strategy. Driving Business Growth & Impactful Changes.

Minnie Ingersoll: Formulas for Fundraising and Valuation

Name: Minnie Ingersoll: Formulas for Fundraising and Valuation
Uploaded: 2016-03-11T17:08:12+00:00
Duration: 1 min 45 s
Channel: GHION.AI
Description: In this segment, Minnie Ingersoll shares practical, experience‑based guidance for early‑stage startups seeking seed capital. She emphasizes a data‑driven…

11 Mar 2016 · 2 min

Watch on YouTube

1:45

In this segment, Minnie Ingersoll shares practical, experience‑based guidance for early‑stage startups seeking seed capital. She emphasizes a data‑driven approach to identifying potential investors by searching platforms like Crunchbase for individuals who have previously written checks of similar size to the amount being sought, especially within the relevant industry and geography. She then recounts a specific formula reportedly used by Sandhill Road: divide the fund’s total size by 50 to determine the amount to request, and then multiply that request by five to estimate the startup’s valuation. Intersperse throughout are caveats—she notes her own limited experience with Sandhill Road and frames the advice as anecdotal rather than definitive—highlighting the need for founders to treat such heuristics as starting points rather than hard rules.

Chapters

So we started just with us as co founders and then we were, I'd already invested, but we were still trying to raise more money, raise seed funding. And someone said, okay, you might think that you want to go like, find rich people that you know in your network and ask them for money, but actually one piece of advice we got was look, go look for people who've written similar checks. So if you go to like Crunchbase, Insights or one of these sites that tells you about people who've written similar checks and you're going to start an online marketplace, look for people in San Francisco, in Silicon Valley, who've written checks for 50k 100k to fund online marketplaces. And that person is likely to be the sort of person who's going to want to write you a 50k 100k check for your online marketplace. Now, the same person who gave us this piece of advice also gave us advice on raising from Sandhill Road. So I don't know if this is completely true, but this is what I was told. Now, caveat, I've been at Google, so I really didn't know anything about raising money from Sandhill Road, but what we were told was, okay, take the fund size and divide by 50 and then ask for that much money. And that was the math. And so they said, look, the partners, they don't want to be on tons of boards, so they want to fund 2530 companies from their fund, but they want to fund 2530, but they want to have some money, so they want to give enough money so they have some in reserve just in case. And then once you've asked for that much money, then multiply by five and that's your valuation. So I'm not saying this is perfect advice, but this is what we were told, right?