So you’ve just started your baby.
Your shiny new company.
You haven’t yet even done a soft launch, but you’re already getting amazing feedback from various and sundry people. And by various and sundry people, I mean people who don’t have your last name.
Then one fine day, you pitch at an Angel event, and someone wants to invest. Trouble is, they will only do so at 20% of the valuation you proposed.
Should you do the deal?
The answer is basically yes.
Check out this HBS article on the Rich vs. King spectrum. You might be in for a surprise.
The bottom line – if you’re a control freak, then by all means, hoard your equity like Gollum clutches Precious. If you want to get rich, then don’t worry about the valuation, just focus on making an insanely great company.
https://hbr.org/2008/02/the-founders-dilemma
