Archive for the 'Valuation' Category

The Berkus Method: Valuing an Early Stage Investment

March 27 2012 No Commented

Dave Berkus has just published the most recent version of his method for establishing a pre-money valuation for early stage companies.  See his blog at The Berkus Method: Valuing an Early Stage Investment

A Bubble for Seed Stage Valuation

January 19 2012 one Commented

When entrepreneurs raise equity capital for startup companies, the investors’ percentage of ownership is determined by the negotiated valuation for the company at the time of investment.  For example, if the negotiated pre-money valuation is $1.5 million and the investors provide $500,000 in equity investment, the investors are purchasing 25% of the company [$0.5 million […]

Kevin Learned’s Perspective on Valuation

November 29 2011 No Commented

Kevin is a friend and angel leader in Boise, Idaho.    Dr. Learned is a counselor at the Idaho Small Business Development Center at Boise State University where he specializes in counseling with entrepreneurs seeking equity capital. He is a member of the Boise Angel Fund, and is a principal in Loon Creek Capital which assists […]

2011 Valuation Survey of North American Angel Groups

October 8 2011 7 Commented

During the summer of 2010, I developed a workshop, A New ACEF Valuation Workshop for Angels and Entrepreneurs.  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 […]

Huge Opportunities Do NOT Command Huge Pre-money Valuations

May 30 2011 one Commented

One entrepreneur has a company which appears to be scalable to a $30 million exit value in 5-8 years and a second entrepreneur’s venture seems to be scalable to $200 million in exit value in the same time frame.  Yet, at the pre-revenue stage of development, angel investors price both companies at a pre-money valuation […]

Valuations – Higher in Silicon Valley, Seattle and Boston than for the Rest of US

April 15 2011 No Commented

As I reported last week (Current Pre-money Valuations of Pre-revenue Companies), I met with a group of 40-50 angel leaders to discuss the valuation of seed/startup angel deals at the Angel Capital Association Summit in Boston, April 4-6, 2001.  We reviewed a survey of angel groups all over the country completed last summer (included in […]

Current Pre-money Valuations of Pre-revenue Companies

April 11 2011 2 Commented

I just returned from the 2011 Angel Capital Association Summit in Boston, April 4-6, 2011.  It was attended by over 500 angels and associates, including about 60 international angel leaders.  It was an excellent meeting – the best yet of the half-dozen or so US ACA angel Summits to date. On Wednesday afternoon, I was […]

Startup Valuations: Using Several Methods to Determine the Pre-money Valuation of Pre-revenue Companies

March 4 2011 2 Commented

Since the end of January, we have posted explanations of five methods for establishing the pre-money valuation of pre-revenue companies, specifically:                 The Scorecard Method (January 31, 2011)                 The Venture Capital Method (February 5, 2011)                 The Dave Berkus Method (February 14, 2011)                 The Cayenne Valuation Calculator (February 19, 2011), and                 The […]

Startup Valuations: The Risk Factor Summation Method

February 27 2011 No Commented

The Risk Factor Summation Method the fifth methodology for estimating the pre-money valuation of pre-revenue companies we have described in recent posts.  Readers may have noted that both the Scorecard Method and the Dave Berkus Method considered a narrow set of important criteria for investment in arriving at a pre-money valuation.  The Risk Factor Summation […]

Startup Valuations: The Cayenne Valuation Calculator

February 19 2011 9 Commented

We recently started a series of posts on establishing the pre-money valuation of pre-revenue startup companies for purposes of investment by seed and startup investors.  The High Tech Startup Valuation Estimator is an online tool developed by Cayenne Consulting to assist entrepreneurs and investors in estimating the pre-money valuation of startup enterprises.   This calculator uses […]