Having started two companies and been on the boards of several more, I have some first hand insights to what work and what doesn’t for early stage companies. While the following are my top four, there are certainly many others. And none of these are truly unique to me. Similarly, there are always examples of companies who’ve done just the opposite and yet prospered immensely. See: a) Amazon losing $7 on each book and making it up in volume, b) Twitter not needing revenue an

I think there are three fundamental truths regarding the valuation of early stage businesses by potential investors: The first is that a pre-money valuation is ultimately an outcome of negotiation, rather than a mathematical calculation of discounted cash flow or any other metric of potential company performance. The second is that, despite the typical non-reliance on formal calculation, investors’ views on valuation are in some way based on a perception of risks and potentia