Developers · Equity

How you do you evaluate a venture lab deal?

Brent Cohen International Marketing, Communications & Product Leader

December 15th, 2016

Tech firms are offering a mix of discounted tech work in exchange for equity as well as some amount of capital investment. How do we evaluate this sort of offer? Clearly, tech development costs money. Will the firm mark up their bid to offer, let's say, $500K worth of development when their actual "cost" is $200K? And how does one consider the cash vs. tech dev "discount"?


December 16th, 2016

in 2 words value of idea's usp and market approach of that idea

Jeevan Singh

December 21st, 2016

Ask them how do they breakdown their services, what salary scale are they considering their developers for example, once you have a vague understanding of the cost structure, then you can cross match that with what you can find those service outside for. That should give you the actual value of their propositions. I don't like these days because I can't control the time of their internal assets, I would not do that deal unless that was the only one on the table.