What criteria determines the valuation of my startup?

Mitch Kitamura / October, 2018


Mitch Kitamura launched JAIC’s US investment arm in 2000 and brings a comprehensive background in business expansion between Asia and the US, having invested across 30 startups. At Draper Nexus, he specializes in Consumer/ Enterprise Internet Services and Mobile in US and Japan.

Watch this video with Mitch Kitamura as he explains what criteria determines the valuation of a startup besides demand and supply.


Video Transcript:

What criteria determines the valuation of my startup?

It’s not a simple answer. In the end, it depends on demand and supply. How many want to invest in the company? When demand increase the price goes up. Demand and supply at the end are the answer.

What determines is the how the company grow. In terms of the customer number, revenue or whatever indicates that the company is growing exponentially, like a hockey stick.

Once you show that then you can start talking to the VCs and investors. They are willing to discuss more and appreciate the value of the company and that increase the potential of the valuation to be higher. What I see as the most important is the growth and the hyper growth of the company and the key Key Performance Indicators (KPIs) that the company is following.

Depending on the industry, but most often already in the software industry at the Series A stage companies start to have customers. You’ve found the pain points of the customer and you’re building products. Even in the series A stage nowadays you have to have some hyper-growth or potentially see the tipping point of the company and that they will blast it off quickly.



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