4 ms·

Is this a common thing? I've got some friends looking to raise a seed round for a B2B small biz product with 50 paying customers, and the deals they're getting

• rdl 15y ago
  Perhaps they should do YC W2012? $170k on great terms with huge value add, and then introduction to top-tier investors, seems like a slam dunk.
• lsc 15y ago
  and? they have 50 paying customers. I'm within 10% of two thousand customers, and my business, realistically, is only worth about $300K in total. (Now, I'm not going to sell it for less than about 3x that, but $300K would be it's fair market value based on the industry standard revenue multiplier.) I mean, yeah, if you aren't poor, $300K is not enough to give up your dream if you have big plans for the company; I'm going to keep trying for better, and I encourage others to do the same. But you need to realize that for most companies without traction? $300K is a lot more than it's worth to someone not emotionally invested in the thing. In reality, it's often quite difficult to get more than a years worth of revenue for a company. There is no reason to feel insulted at that kind of offer, even if you do need to turn it down.