ENT 526 Lecture 7: CLASS 7 ENT

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1. that will depend on how other investors value similar companies. How well you can convince the investor that you really will grow fast. Factors that influence valuation: traction, reputation, revenues, distribution channel. A rule a thumb would be that within 18 months you need to show that you grew ten times. If you don"t you either raise a down round, if someone wants to put more cash into a slow-growing business, usually at very unfavorable terms, or you run out of cash. 1 one is, go big or go home. Raise as much as possible at the highest valuation possible, spend all the money fast to grow as fast a possible. If it works you get a much higher valuation in the next round, so high in fact that your seed round can pay for itself. If a slower- growing startup will experience 55% dilution, the faster growing startup will only be diluted 30%.

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