Investors series — How does valuation works?

  • Save time by figuring out if founders have unreasonable expectations on valuation, so there is no point in talking more?
  • Expectations are important sure, but you can learn more by waiting a little longer
  1. Do they have strong logic abilities?
  2. Do they have a plan?
  1. What dilution are you targeting in this round?

Why startup valuations (at early stage) don’t make sense

When startups are at a later stage, sure there are metrics. Bessemer track public SaaS multiples which can be a benchmark (though need some adjustments). Here is an example of what that would look like:

How valuations really work

There is a formula for valuation. It’s this:

Learning more

What you want to hear is:

  • How long is the runway?
  • What milestones will you achieve?
  • etc etc

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Djoann Fal

Djoann Fal

Author of The Adaptive Economy | Forbes 30U30 | Tatler | Jedi | Co-Founder, GetLinks (Alibaba, SEEK) | Watch my talks here: http://y2u.be/Ep4a9Pba374