It is high time that we, the tech community, push for creating value over valuation, in the startup world.
Ben Narasin (@BNarasin) and Jeremy Abelson (@jeremyabelson) have captured some really interesting examples that demonstrate this, in their recent post on TechCrunch. These lines summarize this quite well:
…for founders and funders alike, it’s not just about the valuation, it’s about the whole deal. Focusing excessively on valuation risks losing focus, and negotiating leverage, in the rest of the deal terms. Valuation is a part of the picture, but dilution, all-in dilution, is another very important part. We often say the only “valuation” that matters is the last one, in that valuation and ownership at liquidity is the ultimate measure for any shareholder. It’s a long journey to get there, so pay attention along the way.
Read more here: http://techcrunch.com/2015/04/13/big-valuations-come-with-dangerous-small-print/
Picture courtesy: techcrunch.com