SaaS Startup (received Financial Grant) - Pre-Money Valuation !


1

We are a young B2B SaaS Startup operating in the Social CRM space. First time Entrepreneurs, but with plenty of experience in our respective areas of work. We've received financial grant of 50,000 in cash. We will raise Series A in 6-8 months from now, when the technology is built, and in beta with few paying customers and gained a bit of traction. So, in our case:

  • What could be the potential Pre-money valuation (6-8 months down the line) ? We are putting ourselves realistically at around $3 Million. We may need to raise
  • If we have to achieve $3 million valuation, what key metrics should we focus on, in the next half a year ? (ex: 3 customers paying 300/Month, 25 sales leads, channels signed up etc) ?

We know our goal is to build a product that the market will love, however we don't want to lose perspective on the valuation front.

Thanks in advance !

Valuation

asked Apr 8 '11 at 17:03
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Dhana
16 points

1 Answer


5

Honestly, your posts has several warning flags in it.

We will raise Series A in 6-8 months from now,

Hmnn, getting a Series A 6-8 months after starting from nothing -- not impossible, but definitely difficult.

when the technology is built, and in beta with few paying customers and gained a bit of traction.

I would suggest to reverse the priorities -- get as much evidence of customer demand as possible first, get as many paying customers as possible, and just have the minimum amount of technology needed to reach those goals.

What could be the potential Pre-money valuation (6-8 months down the line) ? We are putting ourselves realistically at around $3 Million.

It's completely and utterly bogus to speculate about valuations without having any customer traction to show.

If we have to achieve $3 million valuation, what key metrics should we focus on,

  1. Prove traction. Paying customers, growth in signups per day, glowing endorsements from customers.
  2. Some sort of sustainable competitive advantage. In the past, this was often unique patented technology. Today it might just be deep knowledge and unrelenting energy -- what Jason Cohen calls an ""unfair"" advantage. Read Jason's entire series, it's really good.
answered Apr 8 '11 at 20:05
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Jesper Mortensen
15,292 points
  • +1 for prove traction. That's really critical. Everything else can be dealt with but with no customers, it's a non-starter. – Jarie Bolander 8 years ago
  • Thanks for your response, Jesper !. We do have traction - we've signed up several early adopters whom we are going to work very closely with during product development and upon proving the value of the product, they will pay for it. – Dhana 8 years ago

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