You've Probably Never Thought about Valuation This Way 🤔

In the last newsletter, I put forth the “Venture Investing Expression” below:

✅ Depth of market problem ∝ solution fit ∝ non-obvious insight ∝ traction ∝ business model ∝ market size ∝ go-to-market strategy ∝ team execution potential ∝ status of fundraise ∝ valuation ∝ stage of business ✅

A startup’s valuation is one of the most critical pieces for VCs. But it's also critical for YOU.  

Here is how I think about it - your startup has a beginning, middle, and end of the story. The startup story. Your story. 

Investors seek to understand the beginning, middle, and the end of the story. They are interacting with you at the beginning, or close enough to the beginning. It’s when you are building product, hiring people, bringing in revenue, etc. 

The middle of the story is one to two years down the road. You ideally have product/market fit. The Go-To-Market strategy is in full swing. You have likely raised a Series A round. You are adding talent to the team at a quick clip.

Then, there is the end of the story. That’s when the company gets acquired which is the reason why any venture investor would choose to invest in the first place. 

👇 Here is my thesis:👇

✅ Founders and Investors must understand how the story might END before you can truly understand the BEGINNING. ✅