As 2025 gains momentum, one topic is dominating conversations between founders and investors: Valuations.
Fresh from the ICE Conference in Barcelona, it’s clear that while valuations remain top of mind, a disconnect still exists between what founders hope for and what investors are willing to pay. Here’s what truly matters:
If you’re achieving 10–20% growth in these areas, you’re likely within the norm. Investors will benchmark you against peers and may show interest, but the “big checks” of 2021 and 2022 aren’t coming back. So, how do you stand out and surpass those benchmarks?
To earn premium valuations, focus on these core elements:
If you’re exploring an exit, the valuation dynamics shift. Investors will approach the process with tempered expectations, often relying on:
In exits, your valuation isn’t just about your metrics—it’s about how your business fits into their long-term strategy.
Whether you’re raising growth capital or pursuing an exit, timing can make or break your valuation.
If you don’t have enough cash flow to sustain operations, investors may exploit this weakness and push you into a fire sale. Prolonged negotiations can lead to a position where you’re forced to accept less favorable terms simply to survive.
To avoid this, always ensure you have 6–12 months of operating cash on hand before entering an M&A or growth capital cycle. This gives you the leverage to negotiate confidently and avoid desperation-driven deals.
At the end of the day, valuations depend on what an investor is willing to pay. Outliers exist, but you can’t build a strategy based on hope. You strategize to be the best business investors compete for. The key is strong fundamentals, a competitive bidding process, and the foresight to maintain financial runway throughout the deal cycle.
I’ll be in London from February 4–6, and I’d love to meet to discuss how to understand your valuation or create a strategy that attracts competitive offers. Let’s talk.
