Raise Millions by Hustle Fund VC Page 28 investors are offering a total of $500k… $300k more than you’re aiming to raise. This means you have more demand in your company than available equity, so you can safely increase your startup’s valuation and still secure the capital you’re looking for. Example #2: Imagine your goal is to raise $2M at a $5M valuation. But no one is interested. Then your valuation is, well… $0. Because there’s no investor demand to participate in your startup’s round. You can’t raise money at a $0 valuation. But you can lower your valuation to a sweet spot where you’ll get to investor demand. Alternatively, you could improve your pitch deck to try and convert more investors. Or you could work to grow the business and “earn” your desired valuation. In practical terms, determining your valuation is less about your “actual” worth and more about what investors are willing to pay. So founders can set a value for their own startups, but VCs will also perform due diligence to determine a valuation they’d feel comfortable investing at. The two sides may then negotiate an acceptable valuation for both parties. Still with me? Because there are two different kinds of valuations that you should know: the pre-money valuation and the post-money valuation. hustlefund.vc / @hustlefundvc