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* If your company comprises a few founders/consultants, a great idea, a solid business plan, a working prototype, but none of you have a proven business track r

* If your company comprises a few founders/consultants, a great idea, a solid business plan, a working prototype, but none of you have a proven business track record, your typical pre-money valuation will be in the very low millions ($1 million to $3 million is typical). You should be looking for a seed round of $0.25 to $1 million. This is a difficult environment for you, and you should try getting some experience on your side * If your team has a successful start-up track record, and if you have a 2-5 person management team with significant e-business or technology experience, your pre-money valuation jumps into the high single or low double-digit millions. $6 million to $15 million is the typical valuation range, and you should be looking for a first round of $3 to $10 million. From: http://oz.stern.nyu.edu/startups/vc.html http://oz.stern.nyu.edu/startups/vc.html

SwellJoe 18y ago
I'd point out that they are no longer at the "prototype" stage, and have very respectable traction. Having users acts as a great substitute for "business experience". Thus the first category and valuation suggestion isn't really applicable. Of course, it'd be even better if they had revenue. Revenue trumps all, and means that you're unarguably in the control position--no answer the investor can give can shutdown your business, if you have revenue sufficient to keep it rolling. But, I think they've already proven they have a lot of the stuff investors look for...so, they're somewhere between your two suggestions even if they have no prior "e-business" experience. It also sounds like they're very well-placed for a low-millions acquisition. Partners are the most likely acquirers, and there's a lot of websites that'd like to partner with a cool product like StormPulse (though it's cyclical, so this month it's hot, and it'll drop as the hurricane season dies down).
netcan 18y ago
That suggests that the difference between management teams at this stage is worth $1m - $14m. Incentive for dummy managers?

SwellJoe 18y ago

I'd point out that they are no longer at the "prototype" stage, and have very respectable traction. Having users acts as a great substitute for "business experience". Thus the first category and valuation suggestion isn't really applicable. Of course, it'd be even better if they had revenue. Revenue trumps all, and means that you're unarguably in the control position--no answer the investor can give can shutdown your business, if you have revenue sufficient to keep it rolling. But, I think they've already proven they have a lot of the stuff investors look for...so, they're somewhere between your two suggestions even if they have no prior "e-business" experience. It also sounds like they're very well-placed for a low-millions acquisition. Partners are the most likely acquirers, and there's a lot of websites that'd like to partner with a cool product like StormPulse (though it's cyclical, so this month it's hot, and it'll drop as the hurricane season dies down).

netcan 18y ago

That suggests that the difference between management teams at this stage is worth $1m - $14m. Incentive for dummy managers?