It is an important moment in the cryptocurrency market. The price of bitcoin and other cryptocurrencies has been on a roller coaster ride, and it’s easy to get caught up in this momentum and believe that everything is going to be alright eventually. However, there are many who aren’t able to benefit from this change because they simply don’t have access or their bank account isn’t large enough for them to participate fully in the crypto revolution. If you’re one of these people facing such an issue, here are some tips about how not fall victim
The “value trap pdf” is a document that explains the concept of the “value trap.” The value trap is when an asset’s true value becomes less than what it was originally sold for. This can happen in many different ways, but one example would be if a company is bought out by another company at a higher price.
In his most recent article on Soaring on Ridgelift, Stu Phillips refers to it as The Valuation Trap and also as “the hot button of the week.” It’s unexpected, counterintuitive, and therefore more fascinating and significant, in my opinion. To be clear, I would have stated the exact opposite of what he says. Here’s what he has to say:
Never provide a precise figure in response to the traditional VC inquiry, “So, what value are you aiming for?” Is that clear? Never!
Also, if you’re negotiating with venture capitalists for funding, pay attention to what Stu says first since he knows more.
Because I’ve been favored as a judge at many venture competitions rather than as an investor, the issue is personal to me, and I want the competitors to come up with a suggested value as part of their financial plan. When they seem to have forgotten about value as a major issue, it irritates me.
Stu, on the other hand, is extremely persuasive, especially because he’s talking about actual investment transactions rather than hypothetical ones:
You end yourself bargaining with yourself (a fool’s errand in anyone’s book of strategy) whichever number you offer in response to this question:
- If you offer an unrealistically high figure, the potential new investor may think, “Boy, these people are being really unrealistic…” or worse. Many VCs dislike being the bearer of bad news, so they nod nicely and go on to other transactions where they aren’t the bad guy who pulls you back down to earth.
- Do you think a potential investor would respond, “Oh, that’s much too low; we were thinking of a much larger figure…” if you offer a low number?
As a result, never provide a particular number!
Okay, I’d reply, but isn’t that naïve for the reasons I mentioned earlier? Don’t you simply seem to be unfamiliar with the area and haven’t done your homework? He has a great idea for what you should do instead:
The question is reasonable and may be answered in one of two ways:
- If you’ve ever raised funds before, the response is something like this… “Our previous round had a prize pool of $X million. We believe you would agree that we have made significant progress in developing the business since then, and that this will be reflected in the market valuation.”
- If this is your first time raising funds from institutional investors… “We’re realistic about the market’s value, and we’re interested in hearing your thoughts on what a fair price is.”
This question is used by VCs to test the waters and determine how realistic you are about the fundraising process–think of it as a pass/fail question, and recall the answers above.
So, okay, I’m sold. Take his advise rather than mine… Unless you’re in a business plan competition and I’m one of the judges. This year’s competitions will be held at Rice, University of Oregon, Notre Dame, and the University of Texas.
The “value trap stocks 2021” is a phenomenon that has been present in the stock market for years. It can happen to anyone, and there are some things you should know about it.
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