Comments on: Unexpected Startup Lesson #2: Channel your Inner VC to Understand Startup Valuations

By: cthomaschase

cthomaschase — Sat, 29 May 2010 05:50:26 +0000

i was not, however my partner jeff did a session and there were a bunch of people from the team there. my new startup is keeping me pretty busy these days, so vegas was off the calendar.

By: joe heitzeberg

joe heitzeberg — Sat, 29 May 2010 01:53:50 +0000

Thanks Charles! Did i see you (or your people) speak at LeadsCon in Vegas? Great stuff.

By: cthomaschase

cthomaschase — Fri, 28 May 2010 22:50:26 +0000

i was not, however my partner jeff did a session and there were a bunch of people from the team there. my new startup is keeping me pretty busy these days, so vegas was off the calendar.

By: joe heitzeberg

joe heitzeberg — Fri, 28 May 2010 18:53:50 +0000

Thanks Charles! Did i see you (or your people) speak at LeadsCon in Vegas? Great stuff.

By: Chris Wake

Chris Wake — Fri, 28 May 2010 06:51:51 +0000

Good points. Future value is key.

Entrepreneurs are generally too focused on pre-money valuation, and VCs know this. Where entrepreneurs are often overly optimistic, VCs take the realistic approach. I heard from one prominent Bay Area VC that they assume entrepreneurs will require 2.5x their requested capital and a further 1.8 years beyond best estimates to reach their milestones, and this is figured into the valuation and term sheets that the VC offers, hence some of the disconnect that can occur upfront in negotiations.

By: cthomaschase

cthomaschase — Thu, 27 May 2010 22:41:55 +0000

great post. what we do once or twice they (investors) do all the time. thanks for the insights.

By: David Weisburd

David Weisburd — Thu, 27 May 2010 22:32:08 +0000

Interesting

By: joe heitzeberg

joe heitzeberg — Thu, 27 May 2010 21:06:35 +0000

Great point! i never thought about it like investing in stocks before. That analogy works very well, thanks!

By: nivi

nivi — Thu, 27 May 2010 18:38:44 +0000

Here's another way to think of valuation as an output variable: Valuation is really a reflection of your ability to create a market for your shares. You alluded to this in your post.