links for 2011-02-07

  • Valuation does not exist in a vacuum. Neither do deal terms. Ask anyone who does a large number of deals, either as a service provider or as an investor. They will tell you that deal valuation and terms tend to cluster around certain commonalities. When you hear an investor say “a Series A pre money is around $3M for a pre revenue company” he is telling you that the deals that he has seen have done for similar companies have fallen into this valuation range. This is one of the advantages that experienced investors have over entrepreneurs – they have a better sense of what is “market.”

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