Fundraising: The Equity Bond (Part 2)

Using investor return expectations to meet your fundraising goals

In my previous article on fundraising, I discussed the concept of the Rule of 72, illustrating its simplicity and effectiveness in measuring returns. Now, let's move towards the next logical question: How can we leverage this principle to assess the valuation of our company before we approach prospective investors?

Before we answer that question, let's quickly run through some common ways entrepreneurs and investors value companies. After that, I'll introduce you to a slightly unconventional (but simple) approach that's been effective for me, and one I learned from arguably the greatest investor of all time, Warren Buffett.

When founders and investors discuss valuation, they typically mention either one of the two: