Startup Funding Espresso -- How to Use Comps to Value a Startup: Part 1
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In negotiating the valuation, the investor can use current market comps or comparables to set the initial price. By looking at companies in the same sector and stage, one can find the range of valuations. From there, the investor can raise the valuation based on the values the startup has built already and lower it for the risks remaining. Investors typically look for 20-25% of the equity for each raise.\xa0\xa0 The investor can adjust the valuation depending on how much the company is seeking. Other factors that can change the valuation include recent changes in:\xa0 Market growth -- has the market growth changed? Competition -- has the competitive landscape changed? Also, by applying the current valuation to the fundraise, the investor can see if it is still in line with the longer-term roadmap of fundraising. It\u2019s important to ensure the startup doesn\u2019t set the valuation too high on this round as it may prove difficult to raise a follow-on round at the next valuation. Market comps give the investor a starting point but other factors must be considered. 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\xa0\xa0 Music courtesy of .