Blog Roundup: The best I’ve heard… Clean up that hairball before you try to sell it to somebody else!
Excellent post on some of the pitfalls that entrepreneurs run into when raising funds for their startup after their A Round of investment: Want to Raise Venture Capital More Easily? Clean Up Your Own Shite First
(He’s got a gross photo to kick off his post. Be warned… !)
The thing to remember about the points that Mark Suster raises in this post are that they apply even to many initial valuation negotiations, or post-angel rounds.
If you don’t have a realistic outlook on the value of an early stage company – before a lot of the most difficult execution, monetization, marketing and sales have taken place – and don’t plan for later rounds at reasonable valuations, you may get stuck.
That can happen because of market changes, as this post discusses, or it can happen because you don’t have reasonable expectations to start off.
My advice? Get professional advice before pricing your offering. You and your company will benefit and your fund-raising efforts will be much more likely to succeed with a defensible valuation and reasonable terms, even if you do have to lower the share price.
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