Too many seed-stage entrepreneurs think carelessly about valuation. They see it as merely a means to protect themselves from dilution or worse as a representation of current achievement. The reality is that valuation represents a commitment to future achievement. Investors don’t care what you did yesterday or today. They care what you are going to do tomorrow.

Entrepreneurs should see current valuations for what they are: a pricing spread based upon a current discount to a future valuation. This is a future valuation they will need to reach. Keep in mind that the goal post continually moves until there is an exit. Fall short of the spread and your financing ability dies along with your company.