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How To Determine a Valuation for Your Startup #shorts

Name: How To Determine a Valuation for Your Startup #shorts
Uploaded: 2024-02-14T09:37:39+00:00
Duration: 45 s
Channel: Royston G King
Description: In this short video, the speaker advises early‑stage founders to treat their startup’s valuation as a negotiable, "to‑be‑determined" figure during…

14 Feb 2024 · 1 min

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In this short video, the speaker advises early‑stage founders to treat their startup’s valuation as a negotiable, "to‑be‑determined" figure during due‑diligence with a lead investor. He cautions against claiming a high pre‑money valuation that contradicts the amount a founder would actually accept in a check, using an example of a founder saying the company is worth $12 million while they would gladly take a $2 million investment. The core message is that valuation should be part of the negotiation with the first investors, remaining flexible and realistic rather than fixed and inflated.

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during the due diligence process with somebody who's going to lead is a good time to come up with a fair valuation. So I suggest to, you know, very early-stage founders that they use like the to-be-determined type of thought process on the valuation. You're open to discussions and in setting a fair valuation type of attitude. You know, I hate it when I see someone come in and say they're worth $5 or $10 or $15 million And I say, well, you know, if I wrote you a $2 million check right now, you'd take it for the whole kit and caboodle, right? And so how can you come and tell me that you're worth $12 million? So, but there is, you know, it should be part of the negotiation with your first investors.