The New York Times had an article The New Rules of Angel Investing. The article highlights that the valuations of angel investments have gone down. I had a lunch with a serial entrepreneur yesterday. He told they look for 1.1 Million USD valuation for a company that has a ready product for global sales, first pilot customers, and used their own money $400k. I asked if they feel it is quite low valuation and he answered “maybe but it is good to be realistic in this situation”.
The latest report from European VC market tells that VC’s have done almost none investments in early phase companies. Actually if we think VC investments in Europe in September, almost all companies have been founded 2002 or earlier; only a couple of exceptions. It means in early phase you cannot get VC money. You need private investors. The only way to get a reasonable valuation (for both parties) is a real open market and competition.
What are your experiences from seed and early phase valuations?
