But the reason I’m a valuation hawk isn’t just that I’m a cheapskate (though I most certainly am a cheapskate). It’s that valuation is the universal lever for mitigating the risk of investing in startups.
I care about four things when I invest: People, Product, Market/Traction, and the Deal. The problem is, in early-stage investing, there’s a lot of uncertainty associated with the first three terms.
by Chris Yeh
I used to believe that valuations were not so important in seed investing as the results are so binary. However, as seed stage round valuations go ever higher, more early stage investors are taking a harder look at the parameters of each deal and taking a harder stance on valuation.
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