How to Negotiate Valuation with an Angel

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Last week I was talking with an entrepreneur who was negotiating his initial financing for his most recent startup. He had a group of Angel investors that appeared ready to go, but he had a problem – a big one – his expectations for the valuation of his business didn’t match up with theirs. He had done all the right things: checked with many entrepreneurs, investors and experienced service providers as to appropriate valuations for businesses like his, proposed a convertible bridge structure and been cooperative in due diligence. I really couldn’t fault his approach.

As I listened to his story, and he told me what the investors were offering, I came away feeling that they were trying to rip him off. I told him…

Read entire blog post from February 7, 2011.

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