Venturing in Public – 3/20/25
If you’re lucky enough to get an offer to fund your company, but it is below your expectations for $$ in or valuation, you basically have 3 options. Each comes with its own set of pros/cons. At the most basic level, they are ….
+ Wait: If you have sufficient runway and believe that your metrics will improve, waiting a bit might change the game. This can work well if your existing investors or angels will consider a bridge (usually a smaller interim round). This can be a good option especially if you believe that meaningful milestones are around the corner (e.g. $1M ARR, a big customer closing, key new product release).
+ Shop: Test the market with what you’ve got—carefully. VCs say they don’t like entrepreneurs to shop their offers, but they know a savvy founder will optimize his/her options. Once you have a term sheet in hand, its best to quickly work the room (e.g. convey to other prospective investors a sense of urgency). You need to be careful not to overplay your hand but most VCs secretly love to try to “win” a competitive deal.
+ Close: Often times, the best option is the most obvious. Take the money and get back to work.
Just remember that your #1 job is creating intrinsic value through your startup. While valuation is very important, it’s not the most important thing and it almost certainly won’t mean the difference between success and failure. More often, WHO you partner with is more important than what price. Like most things, all you need is one solid offer to get it done. Good luck out there! Let me know what other advice you have ….
