The Valuation FACE PLANT Nearly All Startups Make! How To Avoid | Dose 032

Answering a question about your valuation? There’s only one RIGHT answer.

The "What’s your valuation?" startup question is a common component of investor Q/A. In this Dreamit Dose, Managing Director Adam Dakin reveals the right approach on how to answer what’s your valuation question when pitching. In general, valuing a startup is not an exact science. There are many variables that feed into this calculation so it’s a part of the many key hard questions investors ask. You need to be aware of and ready for tough questions from investors. Central to investor hard questions, you may be asking yourself, should I tell investors my valuation? In the first stages of diligence, Adam suggests you avoid explicitly telling investors your valuation. This is related to the trick questions investors ask. Explaining your startup valuation has its appropriate own time and place. Seasoned founders have a particular way of answering the what’s your valuation question. They know how to form proper answers around the tough questions investors ask. The valuation question pitching investors is almost guaranteed to come up. VC firms who lead rounds and startup valuation investors have a particularly experienced viewpoint on setting the right terms of the deal. Good investors want to see founders motivated with enough ownership to stay incentivized while getting a targetted percentage of the company that they feel can yield expected returns. Be aware of this question and know how to answer it because when pitching investors valuation question is always a consideration. For more tips on investor Q/A and pitching VCs, check out our other Dreamit Dose fundraising videos. That’s how to answer “what’s your valuation” in about 5 minutes!

[stevebarsh]

Another great Dose @Adam on how to slay the valuation question. Sometimes I've used the "range" technique but in general, agree, let the investor make the offer.

[pedroapetri]

Excellent video! So, the main goal is to show how much are we raising, the milestones that we want to achieve with this capital, but not mention the valuation. It is gonna be hard to hold on and not give a number haha

[arefinzaman]

What about the angel round? They often want to see a specific ask slide that includes a specific valuation.

[martinrandolph]

I had this valuation question wrong for a long fuckin time. Thank you for this gem Adam.

[samuellotz]

Sounds like "You tell me" would be a nice laconic answer.

[oliver_siegel]

Seems like shark tank perpetuated one big misconception

[susstro]

If no valuation. How much of the company do you then give away of the company? 20%?50%?

[bogereayub]

How about when the VC decides to talk about the details on valuation on a follow up meeting .am waiting for your reply, by the way long time .

[Aamirali]

Early stage VCs are looking for 5-10x returns. My question is, do they also set a time in the math? 5-10x returns in how many years let's say?

[nosikuminyoi]

if i'm asking for 100, 000 USD for 20% of the business. isn't this already valuating the it?

[vishnuch]

Hello Adam and Steve, What time of the year is The Best period to pitch a VC, and What would be The Worst period to reach out? (large in-flow of funds, yearly or quarterly quota, etc., )?
Does January start a new investment year for VCs?

[benajfox]

Thank you on the valuation story.... Been to much BS around that topic. You broke it down perfect 👏🏽👏🏽👏🏽👏🏽

[amirgross]

Love the advice. But if you are not valuing the company, how do you determine how much equity the investor will get in return for their investment? will that not be an act of de-facto valuation?

[icanadian]

what if asked "how will the market make that determination?"