How to select your angel round valuation (aka “the $4m rule”)

Thanks for these guidelines, your advice is always helpful. Seems that 3–4m is pretty reasonable for most companies, but I’m wondering how a company should factor in their expected rate of growth not in relation to the valuation but how much they should raise at that valuation.

I know that startups are advised to try to raise 12–18 months of runway but does it ever makes sense for a company to take a smaller amount of money at the seed/angel stage with the hope that they can quickly (say 6–8 months) show enough traction or product-market fit to get to 2–3x the valuation and then re-capitalize.

Has anyone seen an early stage company leave money on the table for this reason ?

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