Before you take money from a venture capital firm, you'll agree to a valuation — how much your startup is worth. That valuation will also affect how much of your company you own. Optimizing for a higher valuation can sometimes mean owning less of your company, so strategies for each founder can vary widely.
How a valuation is determined, investors say, is more an art than a science. There are standard factors that will be considered before putting a price tag on a startup, but the biggest factor turns out to be demand — how many other investors are vying to put money into your company. That said, there's a lot an entrepreneur can do to influence valuation (aside from, you know, building something that's valuable). The more investors you pitch to and the better you are at telling your story, the more interest you'll generate, which will drive up your price Read more...
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