The most common reason for this that no one ever tells you: your valuation is wrong.
When VCs think a founder has unrealistic valuation expectations, they are very likely to ignore the start-up’s request for a pitch meeting. Once you have a correct valuation, this barrier will drop away.
Nothing kills a VC’s interest during a first pitch meeting than an unrealistic valuation expectation. When you present a realistic valuation in the first pitch meeting, you are going to get a lot more follow-up interest from VCs.
Many investment deal negotiations break down over valuation negotiations. When you use my valuation method, you will be able to negotiate valuation effectively with any venture investor and close the deal with a valuation that works for both of you.
CEO of Expara
I am the founder and CEO of Expara, Southeast Asia’s leading venture accelerator and fund.
I have launched and invested in five venture capital funds, invested in 90 start-up companies, and have been teaching entrepreneurship and venture capital for 20 years in Asia’s top universities.
I have found that most start-up founders value their companies incorrectly, which makes it very difficult for them to raise money from venture investors.
More than 50% of the start-ups using my valuation method have raised money either while in our program or within 6 months of graduation.
1. Building a business model and financial plan: A good business plan without a good business model and financial plan means no investment; having both makes investment likely.
2. Using a financial model to do a 5-year financial forecast of your company: investors will always have a financial model and so should you. We give you our pro-forma valuation model for start-ups which is the same model we use for all of our investments, and we show you how to use it step-by-step.
3. Valuing your company correctly using DCF, comparables and the VC method: Valuing your company using these three methods together will put you in the strongest possible negotiating position with VCs.
4. Avoiding the most common valuation mistakes: You will learn to avoid the valuation mistakes that sink start-ups before they even have a chance to pitch, including using the correct valuation methods, but using them incorrectly.
5. Developing an exit strategy: No exit strategy means no return for investors. You will learn how to develop a winning exit strategy for both you and your investors.
1. Building a business model and financial plan: A good business plan without a good business model and financial plan means no investment; having both makes investment likely.
2. Using a financial model to do a 5-year financial forecast of your company: investors will always have a financial model and so should you. We give you our pro-forma valuation model for start-ups which is the same model we use for all of our investments, and we show you how to use it step-by-step.
3. Valuing your company correctly using DCF, comparables and the VC method: Valuing your company using these three methods together will put you in the strongest possible negotiating position with VCs.
4. Avoiding the most common valuation mistakes: You will learn to avoid the valuation mistakes that sink start-ups before they even have a chance to pitch, including using the correct valuation methods, but using them incorrectly.
5. Developing an exit strategy: No exit strategy means no return for investors. You will learn how to develop a winning exit strategy for both you and your investors.
Valuing any company is hard and valuing a start-up company is even harder. Almost all traditional company valuation methods are designed to value large, publicly traded companies. These methods do not work the same way when applied start-up companies.
If you learned valuation in school or at work, you learned the traditional method and when you apply these to your start-up they will give you the wrong valuation.
If you have never studied valuation, and are trying to learn now, most of the available valuation courses will also teach you the wrong approach.
Remember Walt from my example above? He actually paid $10,000 to a big name accounting firm for the valuation that was sinking his investment pitch.
In my course, you will learn the correct way to value your start-up. The way that provides maximum value for both you and your investors.
With a correct valuation, you will be much more likely to get VC investment than you are today.
