Valuation Is a Story. Make Yours Worth Believing! 

Standing in front of a room filled with investors in France last September, we were eager to showcase our innovative approach to a personalised beauty solution. However, amidst the excitement, we realised that beyond the attraction of our technology, the persistent question was: “What’s your startup’s valuation?”

That moment stuck with me. It wasn’t just about defending a number, it was about showing we truly understood our business and its direction. It highlighted the need for clear, realistic valuations early in fundraising.

I experienced how overwhelming it can be to navigate investor expectations while building and growing. So, in this article, I want to share a practical framework to guide you and gain clarity, to speak the language investors understand, without losing your voice.

Whether you’re just starting or scaling, this will help you focus on what really matters: the right questions, the right narrative, and the right numbers.

Start with “Am I Telling the Right Story?”

Valuation isn’t just math, it’s storytelling. 

Ask yourself: What problem are you solving, and for whom? Why are you the right person, or team, to solve it? What makes your solution better or more accessible than others? And the big one: Why now?

These aren’t filler questions; they’re foundational. Investors want to know your solution fits into a real, current shift. Don’t just pitch what you’re building; help them believe in why it matters now.

What Are Investors Really Looking for?

It’s easy to feel like investors hold the power. But the best ones are simply looking for clarity and conviction.

Their decisions are based on managing risk and return. With early-stage startups, they focus on market potential, team strength, signs of traction (even small ones), and a clear exit strategy.

A pre-money valuation under $1.33 million with 10% to 20% equity is often ideal for angel investors. Founders with strong track records may justify valuations of $2 million to $2.65 million, but only with solid proof points. The more credible your case, the more comfortable they’ll feel backing you.

Which Valuation Method Fits my Startup Best?

Valuing a startup can feel like guesswork, but it doesn’t have to be.

Many founders default to Discounted Cash Flow (DCF), but without reliable projections, DCF isn’t helpful for early-stage companies.

Instead, try:

• The Scorecard Method, which compares your business to similar startups. 

• Or the Berkus Method, which assigns value to areas like product, market, and team. 

• The Venture Capital Method works backwards from a projected exit. 

• And Pre- and Post-Money Valuation is essential when discussing equity.

Pick a method that fits your stage, and be able to explain why.

Do my Numbers Tell a Compelling Story?

Investors read your business through numbers. 

• A strong LTV to CAC ratio (above 3:1) shows efficient growth. 

• Healthy gross margins reflect pricing power and discipline. 

• Your burn rate shows how long you can operate without new funding. 

• And good unit economics prove your model can scale and sustain itself.

You don’t need perfection, just clarity and understanding.

Are my Financial Forecasts Building Investor Confidence?

You don’t need to predict the future, just plan for it.

Share 3 to 5-year projections, with both conservative and ambitious scenarios. Show revenue, EBITDA, margins, and assumptions. Be transparent about what’s actual vs. forecast.

This builds trust. It shows you’re thinking long-term and managing uncertainty with intention.

Do Investors Know Exactly How You’ll Use their Money?

Don’t just say you’re raising $1 million; break it down. For example, 40% for product, 30% for marketing, and 30% for hiring. If you’re raising in phases, show the timeline and what each tranche unlocks.

Clear use of funds shows maturity and keeps you focused, too.

Do I Have a Clear and Realistic Exit Plan?

Even early on, investors want to understand how they’ll see returns.

Are you aiming for acquisition, IPO, or buyback? Outline a rough timeline (typically 3 to 5 years), expected returns, and examples of likely acquirers. 

It doesn’t need to be rigid, it just needs to show you’ve thought it through.

Final Thoughts from a Mentor

Be bold, but stay grounded. Let your numbers build trust, and your vision create belief. Investors back teams as much as ideas, so lead with clarity, conviction, and purpose.