What is the typical valuation/discount for branded lead angel investors (Dave Mcclure / Peter Thiel, Jeff Clavier etc.)?
I think this question (if I’m reading it as intended) may have a mistaken premise. It’s not as if there is “an official valuation” for a given startup, and that Dave McClure gets 10% discount off of that number for his investment, while Jeff Clavier gets 15% off and I get to pay a 5% premium :-). Rather, it comes down to whomever is willing to provide a term sheet sets whatever valuation s/he thinks is appropriate under the circumstances, which the company either accepts or doesn’t. And once there is a round in progress, other investors (assuming there is still room available in the round after the lead investor) decide whether or not they are interested in this particular opportunity at whatever the valuation for the round is.
Economics are one component of an early stage investment, “investor brand” is another, and “value-add” is a third. Frankly, brand may be the least important of the three. I know of many, many lesser-known angel investors who would be much better matches for many startups than would be better-known ‘names’, because the former have more domain expertise, better contacts in a given industry, and more time to spend with the company. If one is investing in 100 companies as an angel (or a VC) there are clearly limits as to the amount of hands-on contribution one can make.
*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *
Written by David S. Rose
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First, it’s important to understand that the four platforms you list fall into two very distinct groups.
Kickstarter and IndieGoGo are project-based crowdfunding platforms through which anyone can contribute money, either as a donation or with the promise that they will receive a tangible ‘reward’ of some kind if the project is successful.
Gust and AngelList are equity-based platforms, used by Accredited Investors to facilitate the investment of money for an ownership interest in