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Valuations 101: The Risk Factor Summation Method

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The Risk Factor Summation Method the fifth methodology for estimating the pre-money valuation of pre-revenue companies we have described in recent posts. For more information on determining the average valuations in your area, see the Scorecard Method. million pre-money valuation. million.

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How does someone get a meeting with angel investor David S. Rose?

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You can find this in a number of places, but in a nutshell, I prefer to invest in highly-scalable, technology-based ventures, with a particular focus on platforms, at a very, very early stage (but, oxymoronically, where there is already some type of traction).

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10 Rules of Thumb for Startup Investment Valuation

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How much is NewCo worth to investors at this point (pre-money valuation)? What percentage of NewCo does the investor own after the $1M infusion (post-money ownership percentage)? On the other hand, if the pre-money valuation is $4M, the founders ownership remains at a healthy 80% level.

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2011 Valuation Survey of North American Angel Groups

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To provide some reference points, I surveyed thirteen angels groups in North American to determine their recent experience in negotiating the pre-money valuation of pre-revenue companies. See the 2010 data reported here: Current Pre-money Valuations of Pre-revenue Companies. Current Average.

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Knowledge Is Power: Convertible Note Financing Terms, Part IV

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Assuming a hypothetical $100,000 investment at a 10% interest rate, this kind of payoff would yield a return of $5,000 ( 5% ) six months later – not exactly the kind of return angel investors are looking for when they make risky early stage investments. a mix of cash and stock) received by other equity holders in the transaction.

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Valuations 101: Scorecard Valuation Methodology

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This method compares the target company to typical angel-funded startup ventures and adjusts the average valuation of recently funded companies in the region to establish a pre-money valuation of the target. In most regions, the pre-money valuation does not vary significantly from one business sector to another.

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Knowledge Is Power: Convertible Note Financing Terms, Part III

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Particularly when there are multiple closings taking place over a period of months, the fuse burns awfully quickly on a 12-month note given the many competing priorities of early stage entrepreneurs. First, a word about the maturity date. In my experience, a term of 12 to 24 months is common, with 12 months being on the short end.

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