I think about creating value all the time. I mean ALL the time. It didnʼt used to be that way. The status quo was that I worked hard toward project goals, got my paycheck every two weeks, had my weekends off to do as I liked, and waited to see what the percentage raise was going to be. Anyone identify with this?

Then, I left corporate America and started my own company. In the beginning, I still didnʼt think about the creation of value much. I had products to make, and very little money with which to make them. I had to begin thinking of ways to pay for stuff and staff with other than money. I really did not have much time to think about the notion of value because I was busy creating it.

And then, I started to pay attention to this thing called Valuation.

Several elements began to converge for me and heightened my thinking about my companyʼs value, that number that investors ask about, and put a significant weight on, when looking at putting funds into a venture. The questions that began to crop up and bother me were: “Where does this number come from?” and “What items contribute to a companyʼs valuation?” I had just founded an interactive company at the advent of the industry we now label as the Digital Media Industry. In 1992, the emerging ability to digitize multiple forms of media, integrate them, and allow the user to fashion their own way through content was a powerful force that drew me in, all in. This characteristic fed my deep seeded values of self-responsibility and self-actualization - though, at the time, I didnʼt know to call it these things. I was in a new exciting industry that provided a powerful path for people to experience new subject matter, new places, new everything... in the privacy of their homes.

The second thing that occurred, was that my opinion began to matter to this emerging interactive media community. I was just following my passions, when, in the midst of industry meetings I would stand up and say things like, “instead of creating the easy shoot ʻem and kill ʻem content, letʼs use our imaginations and create something life enhancing.” I began to be invited to speak at industry panels and round tables, and major companies wanted meetings to see what we were up to, and visited with us. Major companies, like Random House, Tribeca Productions, Bertelsman, Creative Labs, Chronicle Books, NEC, among others. Our Studio became a stop on that tour of Multimedia Gulch.

The third event that has etched itself in me as part of the valuation discussion, was that a company, whose market cap is north of $1B, wanted to partner with us, a fledgling pre-revenue startup. Why us? Their research had determined that our award-winning products would help enhance their image, taking them from being a second tier player to a leader in this multimedia industry of ours. Their marketing people saw the future in our vision of content. We had been delivering products as fast as our quality standards would allow us, and they were paying attention to those who were making some kind of impact - and picked us, before we ever had a meeting with them. What a delightful surprise this was!

People started to refer to me for feedback, guidance and advice about growing their interactive business, all of which I have always been very willing to share, in most cases.

This leads me to the fourth event I want to impart regarding “things that have stuck with me about value.” A young woman, an early hire at Wired Magazine, had just left her position with the publication to strike out on her own, as a media consultant. She was in negotiations for her first project and came to me for advice on what to charge. As we talked and the scenario became clear to me regarding the dynamics between the parties, and the needs; my suggestion was that she set her rate at $150 per hour. Her eyes bulged as she told me she was thinking more like $30 per hour and would have to think about our conversation. We talked about value a bit and I sent her off on her way, thinking we, women, girls, females, gals, do not know how to value our time properly. And then, I re-focused on the next thing I had to get done and moved on. About a week later, this young woman came to me, rather excited to tell me that she had decided to follow my advice and quoted that $150 per hour rate to her client. They had accepted without “blinking an eye.” THEY understood her value before she did, of course, in relation to what they needed. I recognized her value before she did. Have you had the experience of an entity expressing your worth greater than you perceived?

The whole notion of corporate valuation is a mysterious, tricky one - only because it is, mostly, subjective. The known equations take you so far, but the story of value building is the meat around the skeleton of the equations, whether the company is publicly traded or privately held, a startup, or in idea stage.

As we work, and think, and problem-solve, and create efficiencies, and generate new product ideas and features, we are building value. I have come to understanding this in many discussions with entrepreneurs and venture capitalists. The former group does not understand this nearly as well as the latter, and they like it that way, save for a very few.

I have written Uncover the Best Price for Your Company: A Real-World Method for Valuation to impart what I, as an entrepreneur, have come to understand about how venture capital folks look at investments, and determine valuation in the negotiation process. This understanding can also be applied to yourself: the individual as you work within a corporate structure, because I believe that if we are in the process of creating, we are entrepreneurs, no matter the size of the organization with which we are involved. My intention and hope is to give entrepreneurs guidance, anecdotes, and a method, so that you will have a clearer idea of how to create the full story of your creation and contribution. These principles allow you to be able to come to a defensible valuation that includes the full breadth of your efforts, whether you are negotiating an investment deal or a promotion.

For $9.95, you get a 35-page pdf eBook that gives you:
1. An entrepreneurʼs point of view on value created and value destroyed.
2. Questions to ponder that will ignite and shift your perspectives.
3. A 10-point method to use in creating your best price and valuation.

From one entrepreneur to another.    www.edenseminars.com/products