Midwest Business Appraisal

How Does an Early-Stage Investor Value a Startup?

Startup valuation is one of the more complicated decisions any investor can make. There is no definitive answer, and it can be hard to see eye-to-eye with an investor.


In an article from Seed Camp, author Carlos Eduardo Espinal writes, “The biggest determinant of your startup’s value are the market forces of the industry & sector in which it plays, which include the balance (or imbalance) between demand and supply of money, the recency and size of recent exits, the willingness for an investor to pay a premium to get into a deal, and the level of desperation of the entrepreneur looking for money”.


In the article, Espinal discusses:


  • Many resources and tools out there
  • Gauging the exit size
  • How does an investor decide the current value?
  • What investors are willing to pay

Espinal continues, “there are factors you can influence to increase the value of your startup, and nothing increases your company’s value more than showing an investor that people out there want your product and are even willing to pay for it”. If you can understand what a valuation analyst is looking for, you may be able to get more out of a valuation.


To read more, see the full article from Carlos Eduardo Espinal in Seed Camp.

←Back to Archives