Ep. 180 – Seed Funding 101: How Equity Valuations Work Part 1

SIBP-Blog-NEW-3When you’re talking about equity-based funding, valuations are where the rubber meets the road. In order to buy a piece of a business, you first have to establish an overall value for that business. That can be tricky, because equity-based valuations aren’t always as scientific as you might expect. How can a business that has not yet done much of anything have a measurable value?

In today’s episode, host and business coach Tom Ryan explains the basic concepts behind equity valuations. As always, Tom is joined by co-host and producer Jason Pyles.

• Show opening, and recap of previous Seed Funding 101 episodes

6 Methods for Raising Money for Your Startup (and Their Tradeoffs) blog post (2:00)

• Valuation and equity (3:00)

• Why equity-based funding is more art than science (4:00)

• How valuation perceptions can get colored by big IPOs (5:00)

• Investing in the future potential value of a business (6:00)

• If Tom could only do one thing when raising funds (7:00)

• Why businesses ideas without traction don’t have value (7:30)

• Supply and demand in business ideas (9:00)

• Business idea caterpillars and business model butterflies (9:30)

• Next episode: How startups get funding

• Sign off, and how to contact the show

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