How to pitch Paul Bassat, and the art of valuing startups
The Square Peg co-founder speaks about the pitfalls of resilience in startups and why he's excited about AI-first business models.
He's arguably the "godfather" of Australian startups, and barely needs an introduction. But Paul Bassat, co-founder of Seek and Square Peg Capital, spoke to Capital Brief about the art of valuing startups, when to call it quits and his desire to be more patient.
Startups and innovation clearly still bring you a lot of joy. What is it about the sector that makes you wake up and be excited every day after all these years?
I am excited by the passion and optimism of founders, as well as their desire to do things in a better way. Innovation is the primary way in which we make the world a better place and a very large proportion of the most important innovative breakthroughs occur via startups.
Startup valuations are often a ‘black box’ to those outside the industry. What is your approach to valuing a startup?
It is more art than science. Ultimately you need to form a view on how large a business can be if it becomes highly successful and what sort of return you will receive if the business is able to achieve that outcome. Many startup investments fail and you need to be well rewarded for your successes.
We also compare startup valuations to other startups. This is a useful guide but of course has a degree of circularity.
