There is no such thing as a bad investment, just bad pricing. The breakdown of how much your company is worth boils down to 2 factors; risk & competitiveness.
RISK: how many points of failure/uncertainty will my business face between now and 18 months from now? If the company has to present several hypotheses, it will likely be worthless. Conversely, if the company has launched and has proven unit economics, much of the risk has been mitigated; execution and competition in the market become the bigger factors.
DEAL COMPETITIVENESS: When an entrepreneur has multiple options, that competition can bring more cash into the round and better terms. Most VCs focus on owning 20%.
HOW TO VALUE YOUR STARTUP: You are what the market says you are. If investors are telling you that your startup is worth $1 million, then that’s what it’s worth.
How will investors value your pre-revenue company? Join and follow @drivebyDraftkings for the keys!