I joined the peer-led 2019/2020 Startup Leadership Program in London. Each fellow actively participates in the learning experience and I’ve chosen to run the session on “Valuations and Exits”.
As a class CEO, you can tailor and structure the class to best fit the needs of your cohort. Your cohort will have a wide range of backgrounds and each founder will be at a different point of their startup journey. To run a successful class, I recommend sending out a pre-class survey to assess the objectives of the fellows and to try to cover them to the greatest extent possible. Key questions include:
Have you been through a valuation?
Do you already know how to value your company?
Would you like to apply a valuation method in the form of an exercise or workshop?
How relevant are exit strategies to you right now?
Do you have suggestions or topics that you’re particularly interested in?
What questions would you like to ask a VC or fellow founder?
Based on the survey results, my cohort was predominantly early stage (pre-seed round) so valuation in the context of fundraising (rather than exits) was the most relevant topic. Further, I was able to identify who in the cohort had been through a valuation and was able to speak to them about their experience.
I structured the valuation class around a typical founder’s journey, splitting the time between a seminar and a panel discussion.
During the seminar, I covered topics such as:
Why is valuation important? Why does it matter?
At which points in their journey does a founder need to value their company?
What factors will raise or lower your valuation?
What can a founder do to increase their valuation (e.g., Negotiation, SEIS)?
How does dilution work and what are the implications around control?
Valuation methodologies applicable to early-stage companies
The panel consisted of 4 entrepreneurs. Previous classes frequently had VCs and investors as guests, so this session was focused on the founders and gave them a chance to share their (positive and negative) experiences around valuation and fundraising.
Lessons Learned & Notes to The Next Class CEO
Arrive early to sort out any technology hiccups, arrange the chairs, and set out some tables with water for your panel.
Make use of a pre-class survey to identify who in your cohort has been through a valuation.
Set up phone interviews with founders who had been through valuations to prepare for the class. Get some stories. Get some anecdotes. Find out what mattered.
De-emphasise financial theories. Most standard models are not relevant or applicable to early-stage companies and you will exclude SLP fellows without a finance background. No investor ever sat down with a founder and poured over a spreadsheet to value their company.
Limit your panel to a maximum of 4 speakers (3 would be preferable).
Ask one of the fellows in the class to be on standby in case a panellist drops out.
Invite your speakers and fellows to the pub after the session. This can make everyone’s evening more enjoyable.