A lot of founders screw up their equity rounds by pitching w/ a valuation in mind At worst, someone hits ur bid and U coulda raised higher At worst U scare people away, have to pitch later at a lower valuation and it’s negative signal Plz plz plz let the market set valuation
One reason they do is that most investors ask for one. I've taught founders many tricks for avoiding giving an answer, but the investor usually has the power in this situation, so it's hard for founders to refuse.
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I train my son with this one "A gentleman never tells"
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Please share a trick or two. Been in this situation many times.. Also, standard question is asking valuation at previous round on 1st meeting - what would you say there?
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Every single investor I have ever spoken to about this has refused to lead with a valuation. Makes a real power dynamic happen right off the gate. Creates a feeling they are going to squeeze for more. So then you gotta open higher. Which is backwards - investors know more.
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