Valuation for Seed Stage Startups (3 Rules You Need to Know)

One of the most common questions we get is how do you value early stage companies (at a seed stage) before there's revenue?

Generally as businesses get larger and raise more capital, you'll get access to metrics that will drive a business valuation. Especially when these business go public, you can use comparable metrics with other companies on a multiple basis; such as on a profit multiple or revenue multiple.

While these businesses are much larger, these metrics are a great guide for what to expect in the future.

But in an early stage startup, when there's no revenue, very few metrics, and the business is essentially an idea or a PowerPoint where teams are looking to get formed - there's no real comparables or metrics to look at.

So typically valuation comes down to a negotiation between founders and investors.

But what rules do you need to keep in mind when it comes to negotiation?
David Gowdey, Managing Partner at Jungle Ventures breaks it down for us.

0:00 - How to value a seed stage business
0:18 - Public company vs startup valuations
1:02 - Founder & investor negotiation
1:36 - Don't price too high
2:09 - Know how much capital you want to raise
2:53 - Collect information about the market
3:41 - Summary

WHO ARE WE?

Jungle Ventures is a Singapore based Venture Capital Firm that invests in regional or global technology category leaders from Asia.

We collaborate closely with Founders to build the intrinsic value of their company by building a scalable organization and providing dependable long-term capital.

We have grown to become one of Southeast Asia's largest independent venture capital firms.

FIND US:

Website: https://www.jungle.vc
LinkedIn:   / jungle-ventures  
Medium:   / jungle  
Facebook:   / jungleventures  
Twitter:   / jungleventures@jungleventures  

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