Gust
NOVEMBER 1, 2011
It is one of the useful methods for establishing the pre-money valuation of pre-revenue startup ventures. The concept is simply…since: Return on Investment (ROI) = Terminal (or Harvest) Value ÷ Post-money Valuation. (in in the case of one investment round, no subsequent investment and therefore no dilution).
Both Sides of the Table
SEPTEMBER 28, 2014
Gross margin (GM) is the amount of profit you make per sale of your product or service taking into account your total costs of selling that product or service. If you have a very low gross margin (10-30%) it can be very hard to build a large, scalable business because you need to make a lot of sales to cover your operating costs.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Both Sides of the Table
JULY 22, 2010
How VC’s Calculate Valuation : We walked through a standard deal where you raise $1 million at a $3 million pre-money valuation leading to a $4 million post money valuation. This states how the proceeds from a sale or dissolution of the company will be distributed.
Both Sides of the Table
JUNE 5, 2011
Then you can do a little bit of research and find out that very few companies ever achieve this valuation in a trade sale so you’re clearly gunning for an IPO. So rounds tend to be “range bound&# where the top end of the valuation spectrum often being done in boom markets (i.e. The risk wouldn’t be appropriate.
Both Sides of the Table
JULY 25, 2010
Because I built two SaaS companies and sold my second one to Salesforce.com (where I then took on the role of VP Products) I am often asked to look at SaaS and/or sales-oriented deals for others. I’d far rather dilute 10% early and get some investor traction than to wither for another 3-6 months trying to get my seed round together.
Lightspeed Venture Partners
SEPTEMBER 21, 2013
to fund the company at a $6M post money valuation from a number of investors including Selena Gomez. Despite having over 500k downloads and making $450k in revenue over the last 21 months, he had only $185k left in the bank, which meant that he would be out of business in 90 days if he didn’t raise more money.
This is going to be BIG.
MARCH 28, 2021
Still, a lot of founders are worried about early dilution and how it affects their eventual outcome when the company is sold. Consider the first money you ever take from VCs. You go back and forth on a price and you eventually settle on a post-money valuation cap of $6.5mm, meaning you have sold about 23% of your company.
Expert insights. Personalized for you.
161 
Let's personalize your content