011 - VALUATION IS NEGOTIATED

Valuation is negotiated. In the last episode I talked a little bit about why it makes sense to take cash, even if you have to dilute yourself a little bit more than you anticipated. But let's talk about valuation itself for a second. The reality is that loads of founders go out with a pitch deck saying they're raising.

I dunno, a million pounds at a 10 million pound valuation. But the reality is that that valuation is not something that you set. It's something that your investors will negotiate with you. And why is that? Well, at the end of the day, you are making a sale. You are selling some of your equity for a million pounds, and it is up to your investors to decide how much equity they think that million pounds is worth.

And that's why it's a negotiation. And not only is it a negotiation in terms of how much that equity is worth, so whether it's. 10 shares for a million pounds, or a hundred shares for a million pounds. It's also what sort of rights and what sort of controls does that investor potentially have as well. So never go out with a mindset that you have a fixed valuation in your head and you are gonna stick to it because ultimately great investors are always gonna negotiate that as well.

So remember, don't fix your valuation. Make sure you're prepared to negotiate it and get down to raising that cash the right.

There we go. Hit me up in my dms on LinkedIn or Twitter if you've got any questions. Otherwise, let's get back to building.