Start-ups have two valuation methods.
First, set the estimated time required to achieve the first project milestone through financing. If it is 8 months, add a certain financing period, such as 4 months, and together, you can calculate the estimated cost of the company in this 12 month. For example, 2 million divided by the proportion of shares to be sold. For example, 15% is 2 million divided by 15% which is about1333000. Then this133.33 million is your post-investment valuation. Then subtract 2 million financing, then123.33 million is your pre-investment valuation. This method can be used as the basis of negotiation and evaluation from the perspective of cost and goal.
Second, find a similar company with the same benchmarking and team solution technology. Make an increase or decrease in the valuation of the other party in the same round to determine the valuation of your company. This is also a faster method. Even if you are not an investor, you will definitely use this method to refer to the company's valuation.
Although there are many valuation methods for startups. But the above two methods are more suitable for getting a result quickly. In addition, let me talk about the financing skills of some startups. Generally speaking, startups don't accumulate many customers and cash flows because they don't have their own mature products. Therefore, financing is a difficult thing. However, for the founders of start-up companies, they need to obtain certain funds in order to better collect the development of the company. What should I do? The solution is as follows.
First, it is very important to write your own business plan. This business plan is not only presented to investors in the future, but also can be used to sort out whether your business model is reasonable in theory. Moreover, after writing a business plan, you must read it several times. It is suggested to make it in words first, and then simplify it with PPT. This will not only give investors a simple and clear understanding, but also deepen their understanding of this entrepreneurial project. It is convenient to better explain to investors in the future (this is very important in future roadshows! )
Second, you can find friends, relatives and family around you to be your own angel investors. Because these people know you better, if your project can impress them, it means that your project has certain commercial value. This will give you confidence when looking for other investors in the future.
Third, find more investment institutions to issue business plans. Remember to look at the investment type of this investment institution first. If the type doesn't match you, don't waste time. At the same time, you can also get to know some successful financing bosses and ask them to help you introduce reliable investment institutions.
Fourth, don't trust investors who cut leeks. They say how much money you pay first, someone will come to inspect your project and help you contact quality investors. These are all routines that fool people. I used to spend a lot of money before I finally realized that this was a routine. Let you participate in the training of venture financing for free, and many of them are flickering.
Fifth, start-ups should not pin their dreams on investors, but must first find ways to operate. The first is to test your business model with reality. The second is that making certain achievements is helpful for the subsequent financing. Imagine if you were an investor, would you invest in a company with nothing, or a company with some small achievements? The result must be obvious.
Sixth, don't look for venture capital institutions if you can do it yourself. Because their money is very expensive!