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One of the things that really bugs
Ron
Conway, the prominent high-tech angel investor, is when young startup
companies that still don't have a proven business model start quibbling over
valuations.
"I will not talk to an entrepreneur about valuations for more than five
minutes," Conway, the founder and managing partner of Angel Investors, an
early backer of Google Inc. and many other tech companies, said Thursday at
the
ThinkEquity
Partners Private Company and Venture Capital Summit.
"If they want to talk about it for more than five minutes, I probably do not
want to invest."
His logic is simple. Valuations for pre-seed startups almost always range
between $2 million and $5 million.
"The task is to build a company that is worth $50 million," Conway said.
At that rate of growth, no one is likely to care so much about a million or
two. —Andrea Orr
That is a fair range for a startup valuation - possibly even on the high end of the range. But Ron hasn't mentioned the most important point of the discussions. To succeed, the entrepreneurs must believe the valuation was 'fair and equitable'. More on this important aspect of angel investing at: http://www.angelblog.net/Being_Fair_and_Equitable.html
Thanks, Basil