The median valuation of tech companies funded pre-revenue is $2.75 million, according to a just released survey of angel groups from Gust. With the costs of starting a tech business falling, this means an entrepreneur can raise $500k and only give up 18% of his company to do so. With the promise of revenue down the road, and no financial history on which to base a valuation, this seems reasonable. Every company is of course different, but if an entrepreneur can conserve capital, he or she can retain a large share of the company. Since I’m often asked about valuation, I’ve posted data from some of the larger angel groups below:
2012 Valuation Survey of Angel Groups | ||
Median pre-money valuation of pre-revenue companies | ||
Software, Internet, Mobile and telecom deals | ||
$ millions | ||
All Groups: Median | 2.75 | |
All Groups: Average | 2.96 | |
Selected groups: | ||
Alliance of Angels (Seattle) | 0.8 | |
Atlanta Technology Angels | 1.8 | |
Robin Hood Ventures (Phila) | 2 | |
Vancouver Angels | 2 | |
Ohio TechAngels (Columbus) | 2.45 | |
New York Angels | 2.45 | |
Band of Angels (Silicon Valley) | 2.75 | |
Launchpad Angels (Boston) | 2.75 | |
Mid-Atlantic Angel Group (Phila) | 3 | |
Hub Angels (Boston) | 3.13 | |
Golden Seeds (NY, Boston, CA) | 3.35 | |
Sand Hill Angels (Silicon Valley) | 3.5 | |
Tech Coast Angels (So. CA) | 3.6 |