Valuation. You keep using that word. I do not think it means what you think it means.
It’s not uncommon for terms in early-stage startups to be wildly overloaded, but valuation may take the prize for the most confusing to founders. If you’re unsure about the difference between a pre-money valuation, a post-money valuation, a valuation cap, a 409a valuation, and the value of your common stock at any given time, you’re not alone! But, as a founder, it’s worth understanding enough to avoid equity mistakes and to avoid sounding like that guy from The Princess Bride when you’re talking to investors.
Peter Swan
, CEO
, Gust Inc
12 Nov 2024
