Early money isn't about valuation. It's trust.

Eight-figure valuation. One prototype. And that's not the exception.

As a mentor and advisor, I sit on the other side of the table quite often these days, and I keep seeing early-stage startups aiming for valuations that have little to do with where they actually are.

I get it. I did the same.

Early investors take a real risk

A startup needs an incredible amount of energy to take off, and at the start there is not enough to show: no traction, no proof, no product-market fit. Someone who invests at that stage takes a real risk – on you, your team and your judgement. That's not just money. That's trust, given in advance.

Back then, I didn't see it that way. I saw a negotiation. I pushed for the highest valuation I could get, because higher felt better. Higher felt like winning.

A valuation is a promise

What most founders forget, and I did too: the investor has to earn that money back someday. In early stage, most bets don't pay off, and the few that do have to carry the rest.

A high valuation isn't a prize. It's a promise – and the next round is where you have to keep it.

It also comes at a price. The more creative you get with the valuation, the more creative investors get in protecting their money: preferences, rights, clauses. Fair enough. Someone has to balance the risk when the number runs ahead of the business.

What I would do differently today

Today, I would be far less greedy in early stage. Valuation matters, but it's not the whole deal. I would look at what an investor actually brings: network, experience, doors that open, and a phone that gets picked up when it matters.

A few points of valuation are worth less than someone who stays in when it gets hard. Someone who takes a risk on you early deserves a fair deal – not the best deal you can squeeze out.

What I tell founders today

That's why I now tell founders that a valuation is a promise, not a prize.

What did your first investor give you, apart from money?