You need to set a ‘pre-money valuation’ before you seek equity financing. This is because the investor needs to know how much of the company he/she is going to own as a percentage of the whole company. For example, if you are raising £100,000 and your valuation is £1,000,000 then the investor will own 10% of the company. The investor will always hammer you down on valuation. If you are not yet making revenue you may struggle to be valued over £500k unless you have strong protected Intellectual Property (IP) or are in life sciences or deep tech (e.g. machine learning).
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