Wednesday, July 21, 2010

Attention for entrepreneurs!

- Pravin Gandhi, Managing Partner, SeedFund
I have often seen that new entrepreneurs worry too much about valuation. They should focus on creating value and not valuation. And by value, I mean find paying customers, create an IP and/or a brand - the revenues will follow. Once you have revenues, manage costs so that profits grow - only then you'll have a valuable enterprise.

Remember that Angels or funds who agree to invest in your company also have to make money. They make bets, some work and some don't. So unless the investor asks for over 50% ownership, its OK.

If you feel shortchanged on ownership, ask for an incentive for a superlative performance. If you are a passionate entrepreneur, you ought to be interested in getting on with the job, instead of wasting time looking for the best valuation.

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