Startup Funding Espresso -- Justifying a Startup Valuation
Justifying a Startup Valuation Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Startup valuations differ from standard valuations in that they don\u2019t solely rely on expected cash flows, book value, or other tangible aspects of the business. Intangibles such as quality of the team, intellectual property, product status, and customers are the driving factors. Most angel investors want 25% of the equity for an initial round of investment. In addition, they want to have a say in the business through a board of directors or advisory role. To justify your startup value, focus on articulating the values that are already in the business as follows: Highlight the team you have built so far and their experience. Show what the team is doing to make the company successful. Show the current product development and highlight what has been done so far. Outline the intellectual property you have, including provisional patents.\xa0 Make sure you file your provisional patents in advance of launching a fundraise so you can point to having patent-pending technology. Always note customers even if they are not yet paying for your product.\xa0\xa0 If you do have some revenue use it to prove market validation showing customers will pay for it.\xa0 Customer involvement will generate a higher valuation.\xa0 If you cannot sell the proposed valuation for the raise, consider cutting the fundraise target in half.\xa0\xa0 While the valuation will be the same, the risk will appear lower. 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\xa0 For Feedback please contact info@tencapital.group\xa0\xa0\xa0 Please , share, and leave a review. Music courtesy of .