What should I set my valuation to be?
Setting a valuation seems like a daunting and intimidating task, however, when you realize there is no right or wrong answer you soon come to realize a valuation is like a piece of art. Each individual will interpret it differently and there is no way to satisfy everyone. What's important is having an explanation and rationale to your decision.
The first decision is to determine whether or not a valuation is needed, meaning is this a priced or non-priced round. If you're not pricing the offering it means you're offering an instrument such as debt, convertible debt or a revenue share. In these offerings a valuation on the company is not necessary as it has no impact on the terms of the instrument.
A priced round means your are offering equity, so shares (or units) will be purchased at a specific price. As a reminder, your pre-money valuation should follow this equation: Valuation = Currently issued shares (on a fully diluted basis) x Price per share in this offering.
Now, what am I as a one-year-old technology company with no revenue supposed to do? That's a great question, and even though we will not advise you on what to set your valuation to be, we can share our data with you to help you make the most informed decision possible. Since launching in June 2015, StartEngine has recorded what the valuations of all offerings on our platform.
Simply contact us via the help widget in the bottom right corner of our StartEngine.com homepage, or send us an email at firstname.lastname@example.org and we'll happily supply!