How do you price your upcoming round?

Posted by  Dustin Byington   on May 29 2021

As founders, many things keep us up at night. 

 

But none cause us to toss and turn more than the fear of mispricing our round. 

 

Too low and we just gave away too much precious equity. 

 

Too high and we don't get funded. 

 

If you're like most founders you probably ask around, look at a comparable or two, put your finger in the air, stick a number on your pitch deck, and see what happens. 

 

If you're a CF company that means launching and hoping for the best. Either you sell out quickly (giving away too much) or your campaign stalls and you fail to meet your fundraising goals. 

 

If you're raising VC capital then be prepared for a negotiation where you have one arm tied behind your back and they have a machete. They value companies every day -- putting even serial founders at a disadvantage. 

 

And if you're a first-time founder with no data to support your number... you're probably going to end up giving up a pound of flesh and 15-30% of your company. (See https://www.two12.co/blog/vc-math-primer)

 

At TWO12 we're always hunting for problems to solve for founders... this one came up so many times in our customer interviews that we decided to build a product to solve it. 

 

To learn more go to: https://www.two12.co/fundraise_valuations_modeling

 

 

Topics: cap table, startup, Founder Tool