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.