GerryLangeler

GerryLangeler

1p

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14 years ago @ Highway 12 Ventures - So What Is Your Start-... · 1 reply · +1 points

Two quick things:

A wise man once told me, "If someone offers you money, find a way to take it." What that means in this situation is if you are an entrepreneur and a respected source (be that VC or angel) offers you money, then it is very likely that the valuation - while maybe not to your dream number - is at least reasonable. Feel free to negotiate, but in the end, find a way to say yes.

Second, the most likely outcome is your start-up's valuation was zero, not because it isn't a great team/idea/market, but because for all your best efforts, most start-ups fail. Go into the valuation discussion with this reality in the back of your mind, and a second reality too, that the ONLY thing companies die from is running out of cash. All the other bad things can hurt you, but run out of cash and it's over. So, don't try to optimize for dilution (of lack thereof). Optimize for cash!

Final wise man comment from my past: "If you make the pie big enough, you can leave some on the knife."