If the investment terms state that the company valuation is "pending", the valuation will be done at a later stage. Here is why.
In general, a so-called lead investor is in charge of negotiating the company valuation.
Usually, this lead investor is an institutional venture capital investor or a private investor with lots of experience in both, the sector the start-up operates in and with start-up investments. It is quite typical for investment proposals on investiere, that such professional co-investors are on board.
Thus, investors on investiere benefit from an independent and professional third-party valuation - even in case they are quite inexperienced. The lead investor is in charge of performing an independent valuation of a company and to engage with co-investors along the process. investiere is involved in that process and will represent typical small investor interests.
So, a “pending” valuation can imply (a) a lead investor is not yet identified, (b) the lead investor has not yet concluded the valuation process. Our entrepreneurs are recommended to announce the likely lead investor in the Bulletin as soon as possible.
Only in exceptional cases, investiere (although just representing its investors) will take on a coordination/syndication to ensure a fair valuation can be found.
In closing, we would like to underline that the perceived importance of valuation is commonly overrated in case of early-stage companies. In most start-up situations, a precise assessment of the company value is simply not possible. Thus, the investor focus should be the question “do I think this company will be successful” rather than “do I get a good deal?”.
In this context, we recommend an excellent blog post by Paul Graham, who states that “in early stage investing, valuations are voodoo” but nevertheless gives some very pragmatic rules of thumb.