People estimate that there are 3,000 to 4,000 start ups in Chicago a year.

Your business is worth what anyone will pay for it. Typically, at the good business plan with a good management team and a proven track record (and a product and sales) usually has a pre-money valuation of $1M to $1.5M these days. Any added value needs to be built from here typically in terms of excellent management, the market and the progress on your solution.

Remember every investor will want a step up in their investment during each subsequent round. The angel investor typically wants a 3X return. The VC wants a 6X to 10X return. If you price it too high to begin with, then it will be difficult to attract future professional investment. It is important to understand how each investor will perceive their risk and reward ratio. AS ELEMENTS OF RISK ARE ELIMINATED, THE VALUE OF THE BUSINESS GOES UP.

The first money you raise will be your most expensive. You need to use this money wisely to eliminate elements of risk in the business.

Final Thoughts: Remember it’s still the Golden Rule “He who has the gold, rules”!

Forget the Valuation- Get the Money. If you are successful, the money will matter more than if the valuation.