I just joined this site hoping there is someone out there that can help me. I am trying to put some kind of valuation on my startup.
I have a broker who has an interested developer in my project but I do have a couple problems. First I am cash short, second is I have no idea what I am doing when it comes to the valuation.
To give an expert the basic idea requested $5,000,000 as per milestones reached, I blew the program up to get into a firm in TO, still waiting on the final outcome from a great meeting.
The next part is the business broker who has a contact interested but has put this to me as they are working on it for no cash on my part..
"we would expect 8% of the cash in from our contact in perpetuity, and warrants equal to 8% of the number of shares sold".
Perpetuity scares me, even for an exit strategy to a subsequent buyer of the business.
Company is pre-revenue but there are a lot of things I wanted to get in place before a discussion like this one. (they were very quick to the punch). Yes, there are five year pro-formas etc.
So if there is anyone out there that may have some experience in this, any advice is greatly appreciated.