Valuation is all about estimating how much something is worth, in other words what’s the monetary value of your company?
- How much is your company worth?
- How much money are your trying to raise?
- What amount of ownership are you willing to give up?
- How long do you expect the first initial investment to last?
- Do you have a two year financial projections?
- What key components determine the pricing for your product and/or service?
- Can you predict gross margins?
Angels price your company based on its potential capital return in the future. They look for the potential gains they get in return for their investment. Angels want to look at the time they will have to invest, how much they will make in returns, how is their reputation going to look if they partner with your business, value their contacts, and they could just be investing because of the excitement of launching a new start-up company.
David Amis-Howard Stevenson (2001). Winning angels: the seven fundamentals of early-stage investing. Pearson Education.