In this unit we will discuss how venture capitalists define your company's value, by looking at proxies of value like user adoption, engagement, and revenue. We will also learn that valuation at the early stage is a function of the amount a startup is raising, and the ownership target of the VC. The amount the startup is raising is a function of the hypothesis, burn rate, and runway needed to achieve this next step, and de-risk the business. Finally, we will learn how to put all of these pieces together to communicate and calculate our pre-money and post-money valuation. It will be a function of our hypothesis, burn rate, runway, amount we're targeting, the size of the market and our opportunity and who we're pitching to, how we're thinking about CAC, about LTV, about ARPU and inputs to LTV, and how we believe there is a path to growth to "move the needle" on the fund we're talking to given their likely 20% ownership target.
Click here to learn: "Valuation Analysis"