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Podcast: Investor Connect Podcast
Episode: Startup Funding Espresso – How Performance-Based Valuations Work
Description: How Performance-Based Valuations Work Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In startup funding, the valuation is often fixed and does not change. Performance-based valuation changes the valuation if certain conditions are not met. Here’s how performance-based valuations work: Let’s take an example. The startup proposes a valuation of $10M and forecasts revenue to reach $1M by the end of the year. The investor agrees to a $10M valuation. If the startup does not achieve the revenue forecast, then the investor claws back some of the e...