Liar's Valuation
Questions to ask about your equity:
About the round structure: Was it raised at a single price or in tranches? What did the lead pay versus other participants? What percentage of the round came in at the headline valuation?
About your negotiating position: Given valuation risk, can I get more shares? Can I take more cash and less equity? Is early... See more
About the round structure: Was it raised at a single price or in tranches? What did the lead pay versus other participants? What percentage of the round came in at the headline valuation?
About your negotiating position: Given valuation risk, can I get more shares? Can I take more cash and less equity? Is early... See more
Liar's Valuation
How to spot tiered rounds:
When you see a valuation that seems disconnected from reality and the round size seems small relative to that valuation, it was almost certainly tiered. A good litmus test is 10% ownership.
$50M raised at a $1B valuation. That’s 5% ownership. No lead fund would accept that. The round was structured with multiple prices.
If... See more
When you see a valuation that seems disconnected from reality and the round size seems small relative to that valuation, it was almost certainly tiered. A good litmus test is 10% ownership.
$50M raised at a $1B valuation. That’s 5% ownership. No lead fund would accept that. The round was structured with multiple prices.
If... See more