Thanks to @elisetanyl for inviting me to chat about fundraising during #covid19; the topic of valuation is an interesting one, particularly in the seed stage - some quick thoughts, aimed at the #SEA ecosystem 👇
1/ What's the right valuation for a company? How is it determined? Founders are understandably concerned about dilution, but the reality of the situation is that price is a function of supply and demand
2/ What someone else got for their business and their deal has little to no bearing on what you can get if there is NO DEMAND for your deal.
3/ So how do you create demand for your deal? You have to commit to running a tight fundraising process, and be disciplined about getting folks to NO quickly. Spend your time on folks who are warm, it's generally hard to convince people if they don't believe the business or story
4/ Be crisp on how you're going to spend the money - and flexible on how to achieve it. Don't force a $5M round if you can get to a good set of milestones with $2M
5/ Research the firms you're planning to pitch - there should be a good reason for them to take the meeting (stated interest, themes in prior portfolio choices), otherwise you're wasting your time and theirs.
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