10/19/2021 Tip: VC Startup Valuations | Growthink

10/19/2021 Tip: VC Startup Valuations

Today’s Quote

“The secret of business is to know something that nobody else knows.”
~Aristotle Onassis

 

Today’s Tip

The other day I was asked this important question: What valuation methods do venture capital firms use to value startups?

The answer may not be what you want to hear. VCs don’t usually analyze expected profits or cash flow to determine your valuation. Rather, the biggest determinant of valuation is how competitive it is to fund your company.

Let me explain. If no other VC is interested in funding your company, you might be desperate for funding and the one VC who is interested can offer a very low valuation.

Conversely, if multiple investors are interested in funding you, you have created a competitive situation in which the VCs will increase their valuation of your company in the hopes that you will select them to fund you.

The moral of the story is to always try to find multiple VCs to fund you so you create a competitive marketplace for your company’s equity.

 

Today’s Resource

Forget Old School!

The “old-school” way of raising venture capital is DEAD! 

And that’s why I created this page for you… to show you how to do it right.

See the right way to raise venture capital <– 

There’s a common mistake almost every entrepreneur makes… and if you approach venture capitalists like most entrepreneurs, you’ll NEVER get funded. 

Here’s how to do it right <—

 

Trivia

Today’s Question: Eighty-seven-year-old Democrat Rebecca Latimer Selton held what distinction in the political arena?

Previous Question: Through how many states does U.S. 80–the main northern route from New York to California —pass?

Previous Answer: 12 States.

From east to west, they are: New York, New Jersey, Pennsylvania, Ohio, Indiana, Illinois, Iowa, Nebraska, Wyoming, Utah, Nevada, and California.

 

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