So you want to get bought out!

So you want to raise money or get bought out, let's talk valuation. What is valuation? Valuation is what your company is worth, or, better said what you and industry experts say it's worth. Why do I say that, well there is a BIG difference between what you think it's worth and what the experts say it's worth. Let's take the case of Instagram, who recently got bought out by Facebook for...$1 billion dollars. This company is a little over 2 years old and HAS never made a penny! Now here is the kicker, last month they raised an additional $50 million dollars based on a valuation of...wait for it...500 million dollars!

Now, don't go telling a Canadian Angel Group that story and say you want a similar valuation. For one, Canadian groups are much more conservative and like to set the valuation of a company based on  revenue, first and foremost, and, by amounts already invested if there is no revenue. So if you thought that your company was worth a lot of money, think again. Unless of course you are making money, but then...who needs Angels? As a side note, I must however state that Instagram although having no revenue had and still has 30 million users, so maybe a valuation can also be based on that!

So, if you are looking for money and need a higher valuation, get viewers/users to come to your site, and if you reach that many users, remember, you have to be worth at least $1 billion, so don't settle for less.