Ahh startup valuations. It’s a topic that causes lots of angst, raises tons of questions, and definitely gets the emotions blazing. But let’s take a step back. Why are valuations even important? Besides determining things such as the amount of equity you give up for funding and how much value you are able to extract from your company in the long-term, valuations are important for demonstrating how attractive your business is to investors and in showing how you compare with your industry peers. EGFS Founder and CEO David Ehrenberg and Molly Otter, Chief Investment Officer for Lighter Capital, led a session on How to Increase Your Startup Valuation. Below are some of the key takeaways: There are 3 main types of valuation: 1. Business valuations are based on company price as calculated by cash flows, physical assets, and market sentiment. 2. 409a valuations are required by law if your company …
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