Flightplan was conceived by AngelNews and its partners in spring 2006 to provide a no-nonsense guide with the answers to all the key questions asked by both entrepreneurs and their investors.
Turnover less than £1m and you are worth less than a million”- that’s what I say. Too many companies these days overestimate their value and simply don’t see the risks that we investors take when we back them. I am always (well nearly always) looking at a deal that even a bank won’t touch (come to that, the bank probably will back it if I do, so that means something doesn’t it?), so I need to be compensated for this. I want to get 10x my money if I can and to avoid losing it if I can’t. Therefore, entrepreneurs need to do their valuation sums based on that understanding. If they really believe they can get me a 10x return in a sensible time – 5-7 years by my diary – and then convince me then I will go with them on value, but usually when I challenge them and threaten performance milestones they quickly come around to my way of thinking.