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Valuation advice from a VC

October 1st, 2008

I’ve been reading a blog by two of the Partners at RRE Ventures.  It’s fairly fascinating and quite honest (in a refreshing way).  They wrote a post today about what kind of valuation you want for your startup in the first round.  Their logic is sound but definitely would make a founding team think they’re giving something up :-)  It’s worth a read and definitely worth keeping in mind in challenging financial times.

Here’s the basic premise:

There are at least two very good reasons why you might not want to go for the highest possible valuation.

1. You are probably going to have to raise money again.

2. The valuation you get today impacts your exit possibilities.

Link:  Five Years Too Late by RRE Ventures

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