Startup Funding Espresso -- 5X Your Raise Method of Valuation
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In raising funding you\u2019ll need to propose a value for the equity in your startup called valuation. One way to set a valuation is to use the 5X your raise method. Here\u2019s how it works. Most investors want to see the valuation for their money coming in at 20%-25% of the post-money valuation. This gives a 4X-5X valuation based on the investment. For example, using 4X raising $500K, a $500K investment plus $1.5M pre-money, yields a $2M post-money valuation. In another example using 5X raising $500K, a $500K investment plus $2M pre-money, yields a $2.5M post-money valuation. Using this method, your pre-money ranges from $1.5M-$2M. This gives you a ballpark estimate for setting the valuation of your raise. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let\u2019s go startup something today. ___________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0 For Feedback please contact info@tencapital.group Music courtesy of .