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Zenefits just adjusted the valuation of their last raise from $4.5 billion to $2 billion. The adjustment to their valuation seems to be because of questionable representations to investors. But even without problematic representations, is there ever a circumstance where founders are better off raising money at a lower valuation? Put differently, should you always try to get the highest valuation on any financing?

Listen to this audio stream to learn the situations where too high of a valuation might actually hurt your startup.

Founder Lessons

  • Are valuations for private companies a science or are they arbitrary?
  • Why startups raising money at the highest valuations could later backfire on the companies
  • The best long-term financing strategy for startup founders
Tell us in the comments if you’ve ever had to do a down round because your valuation on a prior round was too high.

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