Dan (dangray)

Essentially it’s finding the price that balances the exit potential with the risk. How sophisticated that calculation becomes really depends on the VC. As a baseline, I think benchmarking valuation with something like Scorecard and getting a view on exit potential with the VC method is a fairly solid approach.

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Note that VC method requires financial projections, which are obviously full of assumptions at pre-seed/seed - but the purpose is more to understand the vision and the scope.

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Some talk about the cyclical nature of VC. You might also call it the inability to learn from past mistakes. Goldfish syndrome. From 2016:

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