Investors are divided on a startup's value. How will you navigate conflicting perspectives?

When there are different opinions on Valuation, I always check for the startup's past financial performance, present financial performance, and future Financial projections. Three methods generally I use for checking my valuation results: DCF method, VC method, and Comparable companies analysis. Based on my analysis, I will then compare it with other investor's results.

When investors disagree on a startup’s value, I start by understanding each person’s perspective. It’s important to listen and find common ground. I look at key data, like growth, and market size, but I also know that early-stage valuations are about potential, not just numbers. My goal is to guide the conversation toward a balanced view, where we can revisit the growth plan and adjust expectations. In the end, it’s about open dialogue and aligning everyone on the risks and rewards.

Valuation can be done in so many ways and everyone has their own lens and past experiences. It will be impossible to arrive at exactly the same valuation. Ways around this are listen to logic, assumptions and arguments plus be prepared to explain your own valuation in a similar manner. Have a surplus of investors where agreement is not doable your are oversubscribed and can with scarcity pick investors who align with you for the long term mutual goals. If the starting point is disagreement then time will not make this better.

I would make explicit the implicit in the assumptions underneath and let the highest and lowest estimators explain their reasoning. The goal in both cases is to narrow the gap between divergent opinions and reach a mutually agreeable estimate. This would help GPs in their post-investment support and benefit LPs from a better fund performance. PS: I use this collaborative and transparent approach when estimating story points during sprint planning.

Anyone claiming a startup’s valuation follows a clear-cut rule is likely only looking at one side of the equation. The truth in this not-so-mathematical formula is that a startup’s value is tied to how much value (both monetary and intangible) it has created and how well it can project and present future growth. It must convince stakeholders that these efforts will yield returns. Strong management and operational numbers are essential, but it’s not just about that. A startup that can’t present a vision involving future risks (both positive and negative) related to its growth may not deserve the 'startup' label and perhaps shouldn’t seek VC funding—there are better options, like traditional banks.