Let’s get specific today. First, consider this first real-life example. A professional services firm with an initial value of $2 million hired me to help boost its value. The trouble with services firms is they are often valued at only revenue times one. Ick. So we beefed up the board and advisors (adding $1 million in value), helped nail down specific strategic alliances ($3 million), mapped out a line of “productized” services ($2 million), and developed new sales channels ($2 million). About six intense months later, the firm sought financing with a respectable pre-money valuation of $10 million. It closed the financing in three months.
Here’s another example of value boosting. I recently mentored an Internet promotion company – we started with no revenue. Zero. Before seeking financing, my team and I had to answer the question: how do you make an idea into a hot commodity? The solution consisted of pulling in a rocking team and coming up with a hot business plan (adding a $1 million in value), developing a compelling product prototype ($1 million), locking in killer alliances ($1 million), and building an IP portfolio ($2 million). We took its value to $5 million in four intense, somewhat sleep-deprived months. Then we raised $2.5 million in financing with a pre-money value of $5 million, and a post-money value of $7.5 million. The $2.5 million invested bought 1/3 of the company.
Value is about potential. Potential today; potential tomorrow. The main reason you keep building value in your company, in all the tangible and intangible ways (and as I’ve shown you, the “intangible” ways often do have dollar-values attached to them!) is because a high value company gets the financing it wants on the terms it wants. It also gets multiple acquisition offers at fabulous terms. The high value company gets the alliances, the staff, and the opportunities it wants, too.
Remember, you are selling the future as you are selling the present. The present must look promising for the future to be potentially glorious. What are you doing to boost the value of your company today?
Christine Comaford, CEO Freedom Fighter
CEO of Mighty Ventures, Inc.
NY Times Best Selling Author
PS: If you haven’t signed up for my CEO Freedom Summit yet, you’re basically missing an opportunity to work with me – and 200+ other like-minded entrepreneurs and intrapreneurs. Grab your seat NOW for $997 (a $2,000 discount from full price). http://bit.ly/5dHdCp
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