Investor question 37 of 50 · Valuation, cap table & terms
“What valuation are you looking for?”
Short answer: the investor is really asking are your expectations realistic? Answer in three steps: (1) give a range anchored on comparable rounds and traction; (2) show the dilution it implies; (3) signal flexibility on terms that matter less.
What they're really asking
Are your expectations realistic? Investors rarely care about the question on its own. They're testing whether you know your numbers cold, whether your assumptions are honest, and whether you can explain them simply.
How to answer, step by step
- Give a range anchored on comparable rounds and traction.
- Show the dilution it implies.
- Signal flexibility on terms that matter less.
An example answer
We're targeting about $8.5M pre-money for $1.5M, which is 15% dilution. That's in line with seed rounds we've seen for companies at our ARR.
Figures are from Loopdesk, the fictional SaaS company in our sample files. Swap in your own numbers and keep the structure.
The answer that loses trust
Avoid
A number you can't justify.
Where the proof lives
Before the meeting, find the number behind your answer. In our workbooks it lives in: Round Simulator, Benchmarks Handbook. If you can open that tab and point to it, the follow-up question is easy.