Entrepreneurs: It’s OK to Divulge Your Last-round Post-money Valuation

[Entrepreneurs: read all the way to the bottom of this post; there are different situations that can look confusingly similar, and it's important to distinguish among them.]

Most, smart investors will ask you for the post-money valuation of your last round of financing at the conclusion of your first meeting (indeed, if a VC doesn't ask for it during your initial meeting, it's usually a sign they've already decided to pass)

It's safe to answer the question, and you should do so without hesitation.

In fact, I think it's a good idea to offer the information even if not asked.  Sounds confident and experienced.

Why?

Investors use this information to triage deals. If they like your idea, they may decide whether to pursue it, based, in part, on how high your last valuation was. It is an advantage to generating interest with new investors that your post-money on your last round was not too high – that’s what they’re really trying to suss out by the question: not spending time on due diligence for a deal where, because of last-round valuation, the expectations of either the entrepreneurs or the existing investors (or both) are too high.

There is no harm in giving it, and to bob and weave in response to the question makes you seem naively evasive — a bad attribute to convey to a prospective investor.

N.B.:  for the reasons set out in my earlier blog post here, this is different (even contrary) advice than I give for disclosing what your valuation expectations are for the financing round that you are currently raising, or, as discussed in another earlier blog post here, what your exit plans are.