Valuation of Pre-revenue Angel Deals

I spent my summer developing a new ½ day workshop on the valuation of pre-revenue start-up companies for angel investors and entrepreneurs. It is now complete and will be delivered in Tucson, Grand Forks, ND and Philadelphia in the next six weeks. This was a volunteer project I completed for the Angel Capital Education Foundation.

While venture capitalists don’t make many investments in seed/start-up stage, pre-revenue companies, we do have some data from the National Venture Capital Association demonstrating that such deals are usually valued at about $2 million (pre-money valuation). Since angels tend to invest at an earlier stage than do VCs, we would expect valuations for angel deals to be the same or somewhat lower than for VCs. Unfortunately, we have virtually no data on the pre-money valuation of pre-revenue companies funded by angel investors. So, I decided to survey a cross-section of angel groups in North America.

Bill Payne

Full Story: http://billpayne.com/2010/09/23/valuation-of-pre-revenue-angel-deals.html