“There is a common misconception that seed valuations are going to be related to traction, but this is not the case,” Brendan says on this episode of Billion Dollar Tech. It actually has more to do with the market in which you’re operating. Here, he walks us through an article written by Henri Pierre-Jacques, a managing partner at Harlem Capital, which breaks down the math of seed stage valuation.
According to the article, the most important metric is how much is being raised in the seed round. The round size varies according to three factors: who the primary investor is in your business, founder experience, and market and industry. Brendan expounds on these factors and other major points within the article.
Tune into this episode of Billion Dollar Tech to find out why previous experience matters, what the hot markets are, and a quick overview of how venture capital actually works.
Quotes:
“Price is baked into the consensus of everything that we buy.” ([1:21]-[1:26] | Brendan)
“Majority of most seed rounds are 2 to 6 million.” ([5:07]-[5:10]- Brendan)
“If you are an early stage founder, this is what determines your valuation.” ([8:27]-[8:31] | Brendan)
Connect with Brendan Dell:
LinkedIn: https://www.linkedin.com/in/brendandell/
YouTube: https://www.youtube.com/c/BrendanDell
Instagram: @thebrendandell
TikTok: @brendandell39
Buy a copy of Brendan’s Book, The 12 Immutable Laws of High-Impact Messaging: https://www.indiebound.org/book/9780578210926
Link to Henri post: https://www.linkedin.com/feed/update/urn:li:activity:6932740171637415936/
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About the Author
Brendan Dell
Brendan Dell is an author and the founder of The Daily Creative. As a freelancer he's worked with clients like Expedia, Cvent, Panasonic, Brother, Windstream and 100+ more to build unignorable tech brands. At The Daily Creative, he shares advice and lessons to help freelancers level up.
