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Valuation of agricultural land?

Should I increase the valuation of my company for an angel investor who is stalling? If so, by how much?

  • I have a startup that has raised a small seed round comprising of a few investors. We have now agreed on terms with another investor who is coming in on the same valuation, albeit a few weeks later. As we all know, a week is a long time in startup land, and since then, a lot has happened in our company from the business development side. We kept the same valuation so that the later investor did not feel too "cheated" but at the same time he is stalling in sending us the funds (for whatever reason). I feel it's a bit unfair for the early investors who took the biggest risk on us the longer it drags on though.

  • Answer:

    You should decide whether or not you’d like this angel to be an investor in your company. If you do, a few weeks isn’t relevant most of the time; do not increase the valuation.* But I would try to get the angel in promptly. How to do this? Manage the process well. Call up the angel (no voicemails, emails or IMs), explain that the round is closing on a date certain (pretty soon but not so soon as to make it difficult to close if there’s truly a logistics problem – say 7 business days). Follow up the call with a crystal clear email and a subsequent reminder. Do what you can to get the angel in the round by that date.  If the angel doesn't get in by this date, you might want to change your mind regarding whether you want the angel in the round.   Of course, if you have decided you don’t want the angel in, the solution isn’t to increase the valuation. Just professionally end the process with that angel. * As to why you shouldn't increase the valuation:  Presumably, you either value this angel and want the relationship (not just the cash) or you don't.  If you don't value the angel, don't take the cash regardless of valuation.  If you do, a few weeks really isn't material 99% of the time and the valuation difference presumably won't be material either.This answer is for general informational purposes only and is ...

Stephen Venuto at Quora Visit the source

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Well the amount of time whether short or long should be less of a factor in how company valuation goes. If the company - in a matter of weeks - increased its user-base by 20% or got a very large sales deal going, the valuation should be proportionate to that increase/positive impact. Your headline statement kind of sounds like you want to raise valuations and lower shareholder % to punish the stalling investor ;) I'm actually surprised that the investors who came in early - albeit by just a few weeks - don't feel a little peeved that you're bending over backwards to satisfy the new investor. If you have a logical reason for the increase you have an obligation to increase current shareholder value through an upward valuation increase. Now to address the stalling part. You should really try to understand the reason for the delay; it actually might be something that is reasonable. If it's not, you should actually think about not taking the funds at all. The investor could actually be a risk factor in business operation and pose a barrier to courting other investors in successive rounds. Good luck.

Sae Min Ahn(안세민)

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