Welcome back to Raise Like a Pro dear reader! ; a newsletter to help you do exactly that.

I'm David, and unlike most people giving fundraising advice, I don't just talk about raising money – I’ve been there as a founder and now I spend my day raising money for startups all over the world from investors all over the world.

I've closed millions in new investment in the past few months alone for startups - and I’m going to teach you how to do it without needing someone like me. This is my playbook; the operational, tactical and yes - sometimes boring stuff you need to do each and every day to raise your round.

No nonsense, no fluff and definitely no fuzzy sheep.

Table of Contents

• My promise to you

• TL;DR: Getting to Yes - how valuation is the ultim …

• 💰 Deals done this week

• Long read: Clowns to the left of me, jokers to the …

• 📖 Interesting things I’ve been reading….

• About Raise Like a Pro

My promise to you

Every piece of advice in this newsletter comes from actual experience: deals I've closed, terms I've negotiated, and strategies I've refined through real-world application.

I'm not here to give you startup platitudes or generic advice. Instead, you'll get practical, actionable tactics that you can implement immediately in your fundraising journey.

The goal? To help you raise money faster, at better valuations, while protecting your interests and your time.

– David

TL;DR: Getting to Yes - how valuation is the ultimate balancing act.

For founders navigating the complex landscape of startup financing, few topics generate more debate, confusion and anxiety than valuation. The figure placed on your company isn't merely a vanity metric—it fundamentally shapes your funding journey, influences investor relationships, and ultimately determines whether your entrepreneurial venture delivers the life-changing outcome you hope for.

And it’s hard dear reader. It’s darn hard!

You want to go high (but not too high) - they want to go low (but not too low). And what happens when you think you’ve done it brilliantly and end up with a massive valuation to show off to your mates?

Join me as we dig in down below and unpick one of the most emotive topics in startup fundraising.

💰 Deals done this week

• Cambridge-based Maxion Therapeutics has raised £58 million in Series A funding, led by General Catalyst with backing from British Patient Capital, Solasta Ventures, and Eli Lilly. The biotech firm is developing KnotBodies, antibody-based drugs designed to target ion channels and GPCRs, overcoming challenges in treating inflammatory diseases such as atopic dermatitis and inflammatory bowel disease. Maxion’s early-stage programs also explore treatments for pain and cardiovascular disease and have previously raised £13M in 2023, read more.

• Leeds-based Eventum Orthopaedics has raised £3.8M to expand the distribution of its QuadSense device, which provides real-time data during knee replacement surgeries. Having already supported 300 procedures, the device aims to improve surgical outcomes, addressing dissatisfaction rates that affect 20% of patients. The funding, led by Northern Powerhouse Investment Fund II (managed by Mercia Ventures for the British Business Bank), will fuel expansion into the UK, US, and New Zealand. The £660M NPIF II fund supports Northern England’s businesses with up to £5M equity investments, read more.

• Bristol-based Zero Point Motion has emerged from stealth with a £4M pre-Series A raise to develop high-precision positioning and navigation sensors for defence, space, and autonomous systems. The startup’s technology fuses silicon photonics with MEMS (micro-electro-mechanical systems), inspired by gravitational wave detection principles, to create highly sensitive, reliable sensors. These sensors can aid spacecraft landing and military operations in contested environments. SCVC, Foresight Group, Verve Ventures, and u-blox AG backed the round, read more.

Long read: Clowns to the left of me, jokers to the right,Here I am, stuck in the middle with you

Revenue-Based Valuations: When They Make Sense

For startups with established and growing revenue streams, applying a multiple to annual recurring revenue (ARR) offers a reasonable proxy for valuation. This approach works particularly well when your business demonstrates consistent growth and scalability.

Based on current market conditions, these multiples typically range from:

• 1x to 5x for startups growing slowly (around 10% annually)

• 6x to 10x for startups growing in the lower double digits (30-40% annually)

• 10x to 20x for technology startups demonstrating triple-digit growth (300-400% annually)

These multipliers reflect not just current revenue, but investors' confidence in future growth. A SaaS startup generating £1 million in ARR but growing at 100% year-on-year might command a £10-15 million valuation, whereas a similar business growing at only 20% might be valued at £5-7 million.

However, these figures aren't applied in isolation. Investors also consider factors like gross margins, customer acquisition costs, retention metrics, and competitive positioning. A startup with proprietary technology and high margins will generally command higher multiples than one with similar revenue but weaker defensibility or profitability metrics.

Pre-Revenue Valuation Approaches

The challenge becomes so much harder for pre-seed or early-stage startups where revenue is non-existent or too small to provide a meaningful basis for valuation. When you're pre-revenue or generating minimal turnover, revenue multiples simply don't make sense—after all, 10x of practically nothing is still practically nothing.

In these scenarios, a more strategic approach involves working backwards from potential exit valuations. This requires honest assessment of:

1. What's a realistic exit value for a company in your sector?

2. How many funding rounds will you likely need to reach that exit?

3. What dilution should you expect at each round?

4. What ownership percentage do you need at exit for a life-changing outcome?

Let's walk through an example. Suppose you're building a B2B SaaS product in a specialised vertical. Based on comparable exits (or comps if you wear a gilet), you believe a £150 million exit in 5-7 years is realistic. Working backwards:

• To achieve a life-changing outcome (let's say £10+ million personally), you'd need to retain at least 7-10% ownership at exit.

• If you'll need three rounds of funding (seed, Series A, Series B) before exit, and assume 25% dilution per round on average, your ownership will reduce to approximately 42% of your starting percentage.

• If you need to retain 10% at exit, you need to start with roughly 24% post-seed round.

• If you and your co-founder are equal partners, that means the two of you need to retain at least 48% after your seed round.

This approach forces realistic thinking about your funding journey and helps prevent the common mistake of raising too little or giving away too much too early.

Understanding Dilution Realities

Just like 💩, dilution happens. There’s no getting away from it. What I typically see is this:

• Seed round: 20% or more

• Series A: 20%

• Series B: 15%

• Series C: 10-15%

• Series D: 10%

Early-stage rounds typically involve more significant dilution, reflecting the higher risk investors take. As your startup matures and demonstrates traction, you generally face less dilution despite raising larger amounts.

This dilution picture becomes more complex when you factor in multiple founders. Two equal co-founders starting with 50% each will dilute to 40% each after a 20% seed round. Three equal co-founders starting with 33% each will dilute to roughly 26% each after the same round.

Further complicating matters is the need for employee option pools (typically 10-15% of the cap table) and advisor shares (often 1-5% collectively). These allocations must be carved out early, further diluting founder ownership. A startup with three co-founders might find their collective ownership dropping from 100% to 65-70% before even raising outside capital, and then to around 55% after a seed round.

Ownership vs. Company Size: The Scale Paradox

One of the most important principles for founders to internalise is that it's almost always better to own a smaller percentage of a much more valuable company than a large chunk of a modestly sized business.

Consider two scenarios:

1. You retain 80% ownership of a company that exits for £5 million (your share: £4 million)

2. You retain 15% ownership of a company that exits for £100 million (your share: £15 million)

The second scenario delivers nearly four times the financial outcome despite the significantly lower ownership percentage. This principle plays out consistently across the startup landscape.

Take the example of Dropbox founder Drew Houston. By the time of Dropbox's IPO, Houston owned approximately 25% of the company after multiple funding rounds. Had he been more protective of his ownership and raised less capital, Dropbox might never have reached its multi-billion-dollar valuation. His smaller slice of a massive pie proved far more valuable than a hypothetical larger piece of a smaller company.

Similarly, the founders of Monzo Bank saw their ownership percentages decline with each funding round, but the valuation of their shares skyrocketed as the company grew from a pre-seed concept to a unicorn. The magic of compound growth on valuation typically outpaces the linear decline in ownership percentage through dilution.

Balancing Investor Quality and Ownership Protection

One of the most delicate balancing acts founders face is between attracting top-tier investors and protecting ownership. The best investors bring far more than money —they provide strategic guidance, valuable networks, credibility, and support during difficult times. The worst investors destroy your business and your mental/physical health. However, the very few prestigious investors often command terms that can be more dilutive or valuation-conscious than less established funders.

This creates a constant tension: should you accept a lower valuation to bring on a blue-chip investor or hold out for a higher number from a less prestigious source? In most cases, the former proves wiser in the long run.

Quality investors typically:

1. Help increase the probability of success through their expertise and networks

2. Attract other quality investors in subsequent rounds

3. Enhance credibility with customers, partners, and potential acquirers

4. Provide bridge funding during challenging periods

5. Have the experience to help navigate complex strategic decisions

That said, founders must still negotiate thoughtfully and meaningfully; don’t negotiate from the gut. There's a difference between accepting a reasonable valuation from a quality investor and allowing yourself to be exploited with an unreasonably low valuation. Understanding market benchmarks for companies at your stage and in your sector provides crucial negotiating leverage.

The best path usually involves selecting investors who bring the most value beyond capital while negotiating terms that, while perhaps not the highest possible valuation, still reflect the true potential of your business.

The Dangers of Overvaluation

While conventional wisdom might suggest that securing the highest possible valuation is always advantageous, experienced founders know better. Raising at too high a valuation—particularly from unsophisticated angel investors—can create significant problems down the road.

Angels, unlike professional venture capitalists, often lack structured frameworks for valuation. They may base investment decisions on personal enthusiasm for your concept, relationship dynamics, or simply following others' lead without conducting independent diligence. This can lead to inflated early valuations that create impossible expectations for future rounds.

When your startup subsequently approaches professional investors who apply more disciplined valuation methodologies (discounted cash flow analysis, comparable company analysis, or standard revenue multiples), the disconnect becomes apparent. If the "market rate" valuation is significantly lower than your previous round, you face several unpleasant outcomes:

1. A "down round" where your valuation decreases, triggering anti-dilution provisions that further dilute founders

2. Existing investors refusing to participate or approve the new round, creating deadlock

3. New investors walking away entirely, leaving you without needed capital

4. Existing investors feeling deceived, damaging trust and reputation

Additionally, an artificially high valuation creates unrealistic growth expectations. A startup valued at £15 million pre-revenue needs to demonstrate a credible path to £50-100+ million in value to justify a successful Series A. Setting yourself up for this expectation without a realistic growth trajectory often leads to failure.

Case Study: A Cautionary Tale of Overvaluation

A couple of years ago, I worked with a promising startup (let's call it TechCo) in the B2B software space. The two founders had exceptional sales skills and managed to convince a group of angel investors to value the pre-revenue business at £8 million. They raised £1 million at this valuation, giving away just 12.5% equity—seemingly a great outcome.

The founders used the capital effectively, building their product and securing early customers. But 18 months later, when they needed additional capital to scale, problems emerged. They approached several venture capital firms for a Series A round.

The VCs applied standard industry valuation frameworks, considering their current revenue (about £500,000 ARR), growth rate, margins, and market opportunity. The most attractive offer valued the company at £6 million pre-money—less than the previous round's post-money valuation of £8 million.

This created an impossible situation. The angels, many of whom had limited startup investing experience, refused to approve what they perceived as a "down round." They couldn't understand why professional investors would value the company lower than they had when it was pre-revenue, despite the business showing traction.

The founders attempted to explain that the initial valuation had been inflated and that the new valuation reflected a more disciplined approach, not a decline in business prospects. However, the angels felt they had been misled about the company's growth trajectory and potential.

A deadlock ensued. The VCs wouldn't increase their offer, the angels wouldn't approve the round at the offered terms, and the founders couldn't secure alternative funding quickly enough. Running out of cash, TechCo was forced into administration—a business with real customers and product-market fit that failed not because of its commercial viability but because of valuation misalignment.

The painful lesson: an unrealistic early valuation created unsustainable expectations that ultimately destroyed value for everyone involved. The founders lost their company, the angels lost their investment, and the market lost a promising product.

Finding the Right Balance

So how can founders navigate these complex valuation waters? Several principles can guide you:

1. Seek realistic, defensible valuations at every stage. Better to raise at a fair valuation than an inflated one that creates future problems.

2. Work backwards from exit scenarios. Understand what ownership percentage you need to retain for a meaningful outcome and plan your funding strategy accordingly.

3. Choose quality over valuation. The right investors add value far beyond capital and increase your probability of success.

4. Understand dilution math. Model your cap table through multiple rounds to avoid surprises and make informed decisions about equity allocation.

5. Communicate transparently with investors. Set realistic expectations about growth trajectories and future funding needs.

6. Remember that sustainable growth trumps vanity metrics. A lower valuation with stronger fundamentals creates more long-term value than an inflated number that collapses later.

7. Consider alternative funding sources. Revenue-based financing, venture debt, and strategic partnerships can provide capital without dilution when appropriate.

The most successful founders understand that valuation is not just a number but a strategic tool that shapes their company's future. They seek the right balance between maximising short-term outcomes and creating sustainable long-term value. By approaching valuation with this mindset, you give your startup the best chance to navigate the complex funding landscape successfully and achieve the life-changing exit you envision.

🤖 AI in fundraising

Fundraising is time-intensive and distracts from what matters - building the business. Emerging AI tools will help you save time whether summarising investor requests, preparing for meetings, or managing due diligence materials.

Here are a couple of tools that have been a game changer for me recently:

• Jasper AI - is purpose-built AI that helps marketers build AI-powered apps and workflows tied to real business outcomes. Try it here.

• Copy.ai is an AI-powered copywriting capabilities that help you create marketing materials including long-form articles, social media posts, and product descriptions. Try it here.

📖 Interesting things I’ve been reading….

• ​UiPath, a leader in enterprise automation, has acquired Peak, a Manchester-based AI company specializing in decision intelligence for inventory and pricing optimization. This move aims to enhance UiPath's industry-specific AI solutions, particularly in retail and manufacturing sectors. The acquisition is expected to bolster UiPath's capabilities in delivering AI-driven applications, leveraging Peak's expertise to optimize business processes and drive innovation. More here. Not the unicorn we all hoped for but super pleased for the team I know well.

• Google acquire Wiz at $32B valuation. ​Google has agreed to acquire cloud security startup Wiz for $32 billion in cash, marking its largest acquisition to date. This move aims to bolster Google's cloud computing security offerings as demand for artificial intelligence services grows. Wiz, founded in 2020, has rapidly expanded, reaching $700 million in annual recurring revenue and projecting $1 billion by 2025. The deal, led by Google Cloud CEO Thomas Kurian, is expected to close in 2026, pending regulatory approval. More here.

About Raise Like a Pro

Raising a funding round isn’t rocket science. It’s not even brain surgery. But it's incredibly time-consuming, HARD and emotionally challenging.

As a founder, your time is better spent building product, finding product-market fit, signing up customers, and building your team. Yet fundraising demands an enormous amount of your attention and energy.

I've witnessed countless founders struggle with this balance. They get stuck in the cycle of endless pitch meetings, confusing feedback, and the dreaded "no's" that seem to pile up without explanation. Even successful companies like Canva, now valued at $25.5 billion, started with their CEO Melanie Perkins hearing "no" over 100 times before getting that crucial first "yes."

What this newsletter will give you

I'm going to share my exact playbook – the same one I use to raise millions for startups across the world. This isn't about theory or inspiration. Instead, you'll get:

• The actual processes I use to close deals.

• Step-by-step morning routines for effective fundraising.

• Real email templates that get responses.

• Meeting scripts that convert to term sheets.

• Pipeline management techniques that close deals.

• The stuff you really need to know so you don’t get screwed by investors.

My days are spent navigating negotiations with every type of investor: angels looking for their next big win, syndicates pooling capital for bigger deals, and VC firms conducting thorough due diligence.

I'll share insights from all these perspectives, helping you understand how each type of investor thinks and what they're really looking for.

What's coming up

In the next issues, we'll dive into a whole bunch of stuff including:

• How to structure your fundraising for maximum efficiency

• The exact outreach strategies I use to get investor meetings

• Common terms to watch out for (and how to negotiate them)

• Ways to create competitive tension in your raise

• Due diligence preparation that speeds up closing

Raise like a Pro is what David Levine does every single day though this business Glenluna Ventures. An exited founder, he raises money each and every day for founders all over the world from investors all over the world.