Valuation: Risk Mitigation Valuation Method
In raising funding, valuation is a key number the CEO and investor must come to agree with. As a startup you must determine your target valuation. There are several methods. One method is the Risk Mitigation Valuation Method. The Risk Mitigation method assigns dollar values to the startup\u2019s accomplishments in each of four categories: Technology, Market, Execution, and Capital. Technology Risk Mitigation -- 125 \u2022 Prototype developed: $75,000\xa0 \u2022 3rd party validation: $25,000\xa0 \u2022 IP filed: $25,000\xa0 Market Risk Mitigation -- 175 \u2022 Market research: $25,000\xa0 \u2022 Early adopter program in place: $100,000 \u2022 Channel partners established: $50,000\xa0 Execution Risk Mitigation -- 500 \u2022 Experienced founders: $200,000\xa0 \u2022 Prior exit: $250,000\xa0 \u2022 Detailed execution roadmap in place: $50,000\xa0 Capital Risk Mitigation -- 150 \u2022 Early funding: $50,000\xa0 \u2022 Only two angel rounds needed: $100,000 If you add up all the values you get a pre-money valuation, $950,000 in this example. 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!