Interesting to read those valuation benchmarks. I'd seen this article in SeedLegals previously https://seedlegals.com/resources/how-to-value-your-company/ that seem to be quite a lot lower.

It was written at the end of 2019, do you think it's just wrong? Or has it changed that much in the past 2 years? Or is it a different set of startups?

Hi Tom, it's Anthony from SeedLegals here, author of that article.

Actually I've seen nothing to suggest that valuations have changed since our article. If you're seeing differently, all feedback welcome.

I should add that I always have a lingering concern that so many people reference that article - both founders and investors - that in some ways it's moved from reflecting market to making market... which means the bar to making sure it's accurate is high.

I have made 43 angel investments in the last 6 months, 90% at seed and pre-seed. 75% in the UK.

The lowest valuation I've paid was £3m, and this happened exactly once.

My mean valuation for seed is around £8-10m.

It tops out at around £20m.

Perhaps my sample is skewed. Not many of the companies I'm investing in use SeedLegals. Investors often insist they use actual lawyers.

You said “It is considered bad form to share the contents of a termsheet with other investors” and “You do not want to be seen ‘shopping around’ your unsigned termsheet”.

The benefits to a founder of shopping around seem clear, so could you quantify the downside risks? Do the risks matter for a “hot deal”?

PS: Thank you so much for your awesome article: it is especially gratifying to see something that isn’t from the valley (I am in NZ).

The downside in the extreme is that the original investor pulls the termsheet and you end up empty handed. I know of cases of this happening, but it's rare.

More commonly, you develop a bad reputation in the VC community, which is very close-knit. Next time you come to raise money, this can hurt.

Hi Tom, just want to say I love what you did with Monzo. I briefly met you back in 2018 at a Monzo meetup when you were on City Road, and it was so amazing to meet the people who created Monzo in-person. And the food was the best of any Meetup I've been to since!

Looking forward to seeing whatever you do next!

Most comprehensive article I have read on fundraising at the Seed / Series-A level. Well done and thank you for your contribution.

Thanks for reading :-)

Thanks for sharing with us, I would love to read "How not to raise investment", exploring the inverse. As in, not how to attract funding in bad ways, but exploring the ways that funding or maybe a misaligned partnership can skew the trajectory of nascent startups/concepts.

AD: great article Tom, covers a lot of questions I've had. One I didn't see was in regards to mentors. How important would you say having a mentor was to some of your initial raises? If at all?

Thanks for sharing this, Tom!

Should European remote startups re-domicile in the US for fundraising (or other) purposes?

We have a London presence/HQ, the team works from 4 European countries, and we raised pre-seed during Covid.

Why doesn’t the back button work on your site?