Startups have different stages

Star­tups have dif­fe­rent sta­ges. Howard Love has well articu­la­ted the dif­fe­rent sta­ges and we have inclu­ded the problem/solution fit, product/market fit and sca­ling “fit” for you to unders­tand how the­se sta­ges over­lap each other.

Whe­re is your star­tup ? What are the KPI’s rele­vant for the sta­ge you are in ? Have you “over­lea­ped” one of the sta­ges ? What kind of veri­fica­tion and facts do you have ?

What are typical exit valuations?

Plea­se note that what gets the media atten­tion are the odd excep­tions, not the median cases – as the median cases are boring. 
Many ent­repre­neurs dream about an exit - in rea­li­ty exits (any kind, even small) are rare and on ave­ra­ge much smal­ler than people usual­ly think.
Only a part of exits are disclo­sed (ie. amount beco­mes public, latest at buyer’s annual report) and as a rule, non-disclo­sed exits are smal­ler (typical­ly <10m€) than the disclo­sed ones. In Nor­dics a median for a disclo­sed exit for a tech­no­lo­gy com­pa­ny is 12-15m€ , for non-disclo­sed less than that. Typical US tech­no­lo­gy exit is esti­ma­ted to be around 5m$. 

How to determine a fair valuation?

Wha­te­ver both par­ties accept is OK, the­re is no book value. As to us, we com­pa­re the sug­ges­ted valua­tion pri­ma­ri­ly against what has been achie­ved to date, secon­da­ri­ly to what the plan is “pro­mi­sing”. The hig­her the price tag, the more you are expec­ted to have alrea­dy, and the more is expec­ted from you going forward. And whi­le the­re is no “List” price, pro­fes­sio­nal inves­tors know what kind of com­pa­nies have been able to clo­se rounds at what valua­tions, which gives a com­pa­rable. Worth noting is that any foun­der with expe­rience in fun­drai­sing will tell you that more impor­tant than the valua­tion, or even the amount rai­sed, is that the process is quick and smooth, allowing you to get back to doing busi­ness as soon as pos­sible. If you try somet­hing that is unrea­lis­tic, you will learn the hard way the wis­dom behind that. 

Gorilla Capital Management Oy

VAT number: 2827907-4

Lapinlahdenkatu 16,
00180 Helsinki


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