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| Is Value in the Eye of the Beholder? |
Is Value in the Eye of the Beholder?
Valuation of Startups
You regularly read in the press about mergers between startups or startup funding rounds being delayed or falling through due to disagreements/disputes over the valuation of a startup.
How do you get the valuation of a startup right? Is the valuation based on simply how much an investor is willing to pay for the shares? Is startup valuation more art than science?
Judging a startup’s growth potential, especially in the early stage, is probably more art than science. Investors look at factors like traction, the hotness of the industry, reputation of the founder and team, distribution channels and revenues to date.
Getting help from mentors or other startup founders who have been through the funding process will help. What has been your experience?
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