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Valuation Methods 101

Gust

This is the first of a six part series on different methods used by angel investors to arrive at pre-money startup valuations. Return on Investment (ROI) = Terminal (or Harvest) Value ÷ Post-money Valuation. (in Then: Post-money Valuation = Terminal Value ÷ Anticipated ROI.

Valuation 174
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Founders: Learning should be your top 2013 New Year’s resolution

The Next Web

Startup courses from Udemy , a crowdsourced platform for learning: Learn how to raise money for your startup : The most popular course on Udemy, gathering advice from 7 founder CEOs including Naval (founder of AngelList), Dave McLure (founder of 500 Startups) and others.

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Revisiting Paul Graham’s “High Resolution” Financing

Both Sides of the Table

Investors who commit early deserve to have a lower price. I argued it in my post on how social proof helps fund raising with angel investors. “what you really need to get an angel round together are your “anchor tenants.” But that’s what great angels do. &# rings true to me.

Finance 286
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The Authoritative Guide to Prorata Rights

Both Sides of the Table

This is important for nearly every institutional investor because once you have 25-50 investments being able to “follow” the investments that are working well is critical to making money. This is for a more complicated reason I call “the mark-up game.”

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A Guide to Using Authority & Social Proof in Fund Raising

Both Sides of the Table

“Yes&# was given to me by one of my favorite angel investor / seed VC’s to work with – John Greathouse of Rincon Venture Partners and author of the blog InfoChachkie that you should check out because it is filled with great info from a guy who has been a very successful operator.

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Why are the majority of angel investors focused on opportunities with large TAM?

Gust

Therefore, if the maximum market cap we can hope for from a company is $2 million at the end of the day, and our investment needs to return 30x, that means the post-money valuation after our investment needs to be $2m ÷ 30, or $66,666.

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NextView’s Greatest Hits

View from Seed

Taking Corporate Venture Money: When it Makes Sense “PayPal took on these investors in small part because it gave us an imprimatur in the stodgy and regulated world of financial services. ” (Lee Hower). ” (David Beisel). ” (David Beisel).