Your First Round Should Have an Investor-Friendly Valuation

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In raising funding, the first round is always the hardest.

Here's why it's so difficult:

There's often no product or revenue to prove traction.

The team, in most cases, is unproven.

The market is not yet well defined.

The ideal target customer has not yet been identified.

How the business will make money is not yet known.

The founder is inexperienced, as this is often their first rodeo.

The first round of funding should have an investor-friendly valuation.

Use family and friends' funding to raise at least half of the round.

Show investors how funds have already been raised.

It's a positive that family and friends believe enough in you to invest.

Invest your own money and show prospective investors that you are committed.

Show how the valuation will go up in the next round when you have more values in business.

Make the first round small so as not to incur too much dilution.

With so few values in the business, most investors will not pay a higher valuation.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

Please follow, share, and leave a review.

Music courtesy of Bensound.