Our inventory management SAAS startup has low revenue (i.e. not close to profitable), but pretty consistent growth and the validation of happy customers proving we offer value. It's now all about execution to build more features that broaden the potential market (i.e. integrating with more external platforms).
Our single angel investor is really pleased with the team and the progress he's seen and is putting together a proposal to double his investment. That's great news!
Here's the problem… How can we get the best possible valuation for this new investment? Traditional measures on revenue/profitability, or even raw growth, likely wouldn't result in a very favourable valuation. But we KNOW this investor really likes what we're doing and believes the key new features we are close to delivering will greatly increase our growth.
How should I prepare to go into the upcoming meeting with our investor?
By the way, this investor is heavily involved. We have monthly in-depth business update meetings with him where we share everything, from customer feedback/challenges, to software design choices, etc.
GOOD NEWS: our angel investor wants to increase investment BAD NEWS: most investors would want a low valuation based on current metrics
byu/snowchess inEntrepreneur
Posted by snowchess
3 Comments
go and get it
The question here to ask is – if you have low revenue and aren’t close to being profitable, what does your investor know that you do not know? Are you running out of money and have asked him for more?
You are in a good spot since your investor already trust you.
For the meeting focus on:
* steady growth even if revenue small
* happy customers and retention
* upcoming features and integrations that will grow market
* any early signs of demand for new features
You can also talk about valuation based on future milestones like after new features launch not just current numbers. Since he involved already be honest about now but show clearly how things will grow. Execution and momentum matter most here.