A brutally honest guide for founders who want money — without losing their minds or their company
❓ FOUNDERS, FIRST QUESTION YOU MUST ANSWER (HONESTLY)
“Is my valuation based on reality… or on hope?”
If it’s hope, you’re not raising money. You’re auditioning for a fantasy film.
1️⃣ VALUE IS CREATED BY CUSTOMERS — NOT POWERPOINT
Tick this if TRUE:
✅ You have paying customers (not “interested leads”)
✅ Customers return without marketing bribes
✅ Customers recommend you without being asked
✅ Revenue comes monthly, not magically
✅ Your business lives outside pitch decks
If you can’t check at least 3:
Your valuation is fiction.
2️⃣ REVENUE TYPES MATTER MORE THAN REVENUE SIZE
Not all revenue is equal.
✅ Recurring > One-time
✅ Organic > Paid ads
✅ Paying users > Free users
✅ Retention > Downloads
✅ Cash in bank > “POC signed”
An unstable ₹50L is weaker than a stable ₹5L.
3️⃣ FRACTION OF A FORTRESS > KING OF A SHED
Ask yourself:
✅ Would you rather own 60% of nothing?
✅ Or 25% of something unstoppable?
Founders who obsess over dilution lose control anyway —
because weak companies invite interference.
Strong businesses buy independence.
4️⃣ VALUATION IS A FUNCTION — NOT A FEELING
Here’s what actually determines valuation:
✅ Growth rate
✅ Profit visibility
✅ Retention rate
✅ Market size
✅ Execution quality
✅ Founder integrity
Here’s what does NOT:
❌ Your effort
❌ Your brand logo
❌ Your degrees
❌ Your sacrifice
❌ Your tiredness
No one pays extra because you worked weekends.
5️⃣ TERM SHEETS DO NOT BUILD BUSINESSES — CASH FLOW DOES
Tick if true:
✅ You monitor runway like oxygen
✅ You know burn rate by heart
✅ You can cut costs without panic
✅ You grow slower but sleep better
✅ You can survive without a funding round
If funding is life support —
investors become doctors.
And you become a patient.
6️⃣ “STRATEGIC VALUE” IS CODE FOR “UNPROVEN”
Warning signs:
🚩 “We will monetize later”
🚩 “This is a scale play”
🚩 “Huge TAM” but tiny traction
🚩 “First of its kind” with no buyers
🚩 “VC-style business” with zero revenue
If it’s so valuable —
why aren’t customers paying?
7️⃣ CONTROL IS EARNED THROUGH INDEPENDENCE
Ask yourself:
✅ Can your startup survive 12 months without funding?
✅ Will you die if a term sheet collapses?
✅ Do you have revenue without permission?
If NO:
You don’t control your startup.
Your cash position does.
8️⃣ HIGH VALUATION ATTRACTS HIGH EXPECTATION
Reality check:
High valuation =
📈 Pressure
📉 Less forgiveness
📊 More scrutiny
🎯 Aggressive scaling demands
⏰ Lower patience
A hot valuation can burn you.
Most founders underestimate this.
9️⃣ THE RIGHT VALUATION IS: “FAIR AND FUNDED”
The best valuation is NOT:
❌ Highest
❌ Loudest
❌ Best ever
The best valuation is:
✅ One where investor feels excited
✅ One where founder feels motivated
✅ One where business grows peacefully
✅ One where negotiation ends quickly
✅ One where partnership starts happily
A deal signed with resentment
will end in regret.
🔟 YOUR BUSINESS IS NOT YOU
Let this sink in:
Your valuation is:
- Not your intelligence
- Not your worth
- Not your destiny
- Not your future
- Not your identity
It is just:
“Today’s price for tomorrow’s risk.”
💣 FINAL REALITY BOMB
If you focus on valuation before building value —
you will stay fundraising forever.
If you focus on building value first —
valuation will chase you.
✅ THE GOLDEN RULE
A startup that prints ₹1 every day is more valuable than one that raises ₹1 cr with no revenue.