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> At a 10x valuation, you (literally) need to show your startup is 10x more likely to win. Progress and pitching are part of that, but so are financial plans.
by Scea91 5y ago
> At a 10x valuation, you (literally) need to show your startup is 10x more likely to win. Progress and pitching are part of that, but so are financial plans.
Nitpick but this is (literally) not true. Expected value is a function of FUTURE VALUE and PROBABILITY. Unless all the wins are the same future value you can't reduce the reasoning just to probability as you suggest.
Practically the valuation is also determined (maybe dominantly) by supply and demand as you are not the only investor in the market.
- lpolovets 5y agoYou're right, I should've said EV has to be 10x higher, not probability of success. That said, in my experience it's much more common to de-risk a business by an order of magnitude than to 10x the market size.