Finding your startup’s valuation: An angel investor explains how
During an economic downturn, investors with money in financial vehicles such as mutual funds and ETFs may have a portfolio that has substantially declined in value. So since they have less money overall, their motivation to invest in risky assets takes a hit.
From an investor’s perspective, valuations are most reasonable when it’s harder for startups to raise money. For example, a company I knew in the beverage space had a valuation of $45 million when valuations were sky high. A year later, when the economy was quieter, its valuation was at $10 million.
Another company I spoke with in the diagnostics space de-risked their offerings by…