How to Value Your Start-Up for Venture Capital（一）.pdfVIP

How to Value Your Start-Up for Venture Capital By Mark Grossman Summary: So, you need some money to get your tech start-up moving. How much of your company should you give up to get the money? This article explains how to value your company for venture capitalists. Author: The author of this article, Mark Grossman, is a shareholder at Becker Poliakoff, P.A., in Fort Lauderdale, Florida. He concentrates his practice exclusively in the computer and e-commerce areas on issues such as web site development, online contracting, technology procurement, Y2K, intellectual property rights, vendor liability and computer litigation. He is licensed to practice law in the state of Florida. Mark would like to acknowledge the research assistance of Andrew Chulock, Michael Cummings, Adam Feinsilver and Sarah Santoro. E-mail: comments@. The Golden Rule So, you need some money to get your tech start-up moving. You are now a part of a large club of startups in the same boat. All of you face the same early question: How much of my company should I give up to get the money? Of course, the answer is as little as possible. Having said that, its important understand that while the valuation of early stage companies is more art (some would say voodoo) than science, there are some rules. The first rule is the Golden Rule -- He who has the gold makes the rules. Understand that everything that follows is a subset of this rule. I dont espouse the Golden Rule because I represent venture capitalists. In fact, I dont represent a single venture capitalist. I end up on the side of those who need the money. I bemoan the Golden Rule along with them. Still, its the rule. If you cant live with it, get a job with an established company because youre not going to like this fund raising game. I take the position that while you must accept th