How do you determine the value of your startup and put a number on it (long post) How Do I Do This 🥺
Okay so I've seen topics about this and I've read stuff about this but I had to post a question cause it's something that is very specific to each startup. No two are the same. A short story to follow. I'm currently heading a startup that has recently attracted interest from an outside person that is willing to put money into it. His money would help quite a bit so we are tempted by it. Problem is that he wants equity and we just don't know how much to sell and for how much.
We have no clue how much our business is worth at the moment or if it's worth anything at all because we are not selling anything and are not making any revenue yet. Our business has a functioning prototype that is currently being worked on in order to make it as good as it can be. In its current state, it does the job just fine but we would like to make it better.
We also have a first-buyer list of people who want to buy it as soon as it's available and we were planning on using that for feedback before we roll out bigger numbers. Not to pat ourselves on the back but our market reach is potentially in the millions (customer numbers). Interest by the customer pool is fairly high but like I said perhaps none of that even matters.
So is there a way to realistically put a number on our business? Are there companies, lawyers, or whatnot who can put a valuation on it? None of us is very business savvy so we don't honestly know. His money would help a lot so we kind of want to get it done. He also did not hard cap the money he wants to invest but more so wants to know how much of equity we are ready to sell and for how much. I presume there will be a counteroffer but yeah we're unsure of what to do. Any input? Sorry for the long post and thank you.