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We are looking to raise Angel funding and was wondering if anyone knows how to calculate the pre-money evaluation?

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Salman Khan has some tutorial on his page regarding Venture Capital and Capital Markets. I found this very helpful. He does a great job of explaining a number of concepts related to capital markets. Some of the tutorials are a bit high level for what you are looking for. Have a look (http://www.khanacademy.org/).

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This depends a lot on what you do. Pre-money evaluations vary widely. Some things to consider are:

  • Like Products or Services: Find another company that is doing something similar. You can check out this site for who has gotten what in terms of funding.
  • The Team: How seasoned is the team and what is their track record? Based on your question, you probably are not that experienced with doing startups.
  • The Technology: Do you have IP? Is the idea even protectable? All of these things either add or detract from the value.
  • The Market: Is it a hot market or even a market at all? What competitors are out there that might eat your lunch once you are in the market?
  • The Milestones: What milestones will you achieve with the money raised? Is that realistic or just a dream, based on what other people have done?

So, without knowing your specific idea, market or your team dynamics, evaluating your pre-money evaluation will be tricky but the questions about will be how you would eventually get to an evaluation.

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I already had this link and was wondering if anyone had some other articles or links that would explain the theory behind it.

Cap Table Basics

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You can look at this link: socaltech.com/Insights/showarticle.php?id=00040 for a sample calculation. Your best bet for what the value actually is would be to look at comps. – Jarie Bolander Dec 14 '09 at 21:32

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