Comments on: How do we set the valuation for a seed round?

By: Quora

Quora — Tue, 23 Nov 2010 21:35:19 +0000

What is the Pre Money Valuation for a startup web based company?…

It can be some black magic and a little bit arbitrary, but generally between 10% and 20%. Venture Hacks has a nice article that might help you decide how to value your company here: http://venturehacks.com/articles/seed-valuation…

By: For a company currently raising an angel round, how would one determine its valuation? - Quora

Mon, 22 Nov 2010 03:24:54 +0000

[...] about.4. When the next round is expected to happen.Insert a dynamic date here Anon User http://venturehacks.com/articles…You should know:Are you going to be raising venture capital in the future?What % of your company are [...]

By: Company Valuation

Company Valuation — Mon, 08 Nov 2010 18:48:57 +0000

Nice approach, thanks for the clear information. If you'd like help with company valuation, Armanino McKenna has a great deal of experience and is a good alternative to the Big 5.

By: Jen

Jen — Mon, 08 Nov 2010 14:33:27 +0000

Also, it would be great for you to discuss the different types of transactions. For example, someone mentioned convertible notes. I am allowing for exchangeable shares because my angels are coming in with the most risk. Why should they just get a discount in the next round? They should get a return right away.

More entrepreneurs should think this way. It has only taken me 5 months to raise the $290K I needed because of the way I structured the deal. We gave 14.5% away to our angels.

By: Sharel

Sharel — Sun, 24 Jan 2010 08:10:15 +0000

Thank you Nivi, you guys rock!

By: Nivi

Nivi — Sun, 24 Jan 2010 00:07:50 +0000

There’s no hard rule. Understand that you will have multiple rounds and dilution in each round. Understand that the founders will need enough equity to stay motivated after the Series C. Chris Dixon previously commented that he sold something like 50% of the business in the first round of SiteAdvisor and he was glad for it.

By: Sharel

Sharel — Sat, 23 Jan 2010 22:06:06 +0000

Hi Nivi,

Can you please provide more details for: why in seed founding I shouldn’t sell more then 20% of the company. e.g., if we get the sum we need to reach a meaningful milestone, for 30% – and the valuation makes sense – why is that a problem?

Thanks.

By: SCeo

SCeo — Thu, 08 May 2008 12:48:47 +0000

Great timely article. The convertible debt is something that seems very common and easy, but for many experienced angel investors, not an attractive option. I’ve gotten feedback from a few angels that said that even with the discount, it isn’t worth it and that they would rather invest in Series A.

Another comment was that with a convertible, the company and the angels are at odds. The angels want a low Series A valuation, thus they get more equity, while the founders/company want a high Series A valuation, thus give away less to the angels/series A investors.

How does one get around this? Any other interesting structures out there?

By: Randall

Randall — Mon, 21 Apr 2008 22:19:30 +0000

Nice article, thanks! The presentation did a great job of expressing the idea in a little dance number.

This could be useful for helping calculate a dollar figure:
http://www.caycon.com/valuation.php

By: David

David — Mon, 21 Apr 2008 02:14:57 +0000

The valuation information I’m still digesting. The video I’ve played 5 times in a row now. Thanks!