How many of you know why investors turn down your investment pitch? You heard investors said your valuation was too high, or tell you this funding stage was too early and they would rather wait for the next round. How many of you even picture that investor pointing out your business valuation is ridiculous using a market value approach, comparing yourself to a unicorn company or even the market size of your competitor.
So how do you go back to the drawing board to redo and business valuation and pitch again? How to change your business valuation?
How to change your valuation
- Take all rejection and failure of your pitch positively, it is just Feedback, not a failure until you give up
- Reduce the funding, the % equity offer and also business value, at the point for you to reach the next level.
- Combine business valuation method, Asset based approach, Earning value approach and market value approach
- Don't include your previous loan as part of the valuation
- Offer partly equity and partly convertible notes, however best is to use convertible notes. This means once you pay back the debts with interest, the investor will return back your shares.
My boss chooses to redo the funding road map for 5 years and lower down the valuation according to the 5 steps, now he got 2 angels with him. I wish him all the best. And my story is true but private and confidential, do PM to connect or to know more about equity funding.
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