My recent investigation of pre-money valuation yields a number: $3 million. That is the current hypothetical value of Humaginarium: pre-grant, pre-investment, pre-product and pre-revenue.
Like any good hypothesis, this one’s just a reasonable guess. It’s based on the parameters of four valuation methods: Berkus, Risk Factor Summation, Scorecard, and Economic. I also took into account the informed opinions of skeptical or auspicious advisors; and factored in the lasting value of cash and intangible assets given to, or generated by, Humaginarium as it bootstraps.
So what’s next after this valuation exercise? There are five steps related to valuation in the foreseeable future:
- Ask federal agencies for SBIR seed funding
- Ask select companies for dedicated industry knowhow
- Ask other companies for transactional corporate sponsorship
- Ask select foundations for program-related investments
- Ask investors for private equity
I estimate that these five asks may increase early-stage valuation (pre-revenue) to just under $10 million – an amount that seems sufficient to develop, test and launch awesome MVPs that generate serious revenue.
Yet not all of Humaginarium’s value can be measured in dollars and cents. The company exists not to make money, after all, but to promote health literacy and empower self-care. I believe it’ll make a lot of money because our business idea is meaningful and strikingly, uniquely commercial. But it doesn’t exist just to make money. For that reason, I want for a word that connotes value the way I think about it. That word may be “worth.”
The dictionary defines worth and value almost as synonyms, and often that’s how they’re used. But not by me. I associate value with benefit. Whether you’re a consumer or investor, the value of Humaginarium is the benefit you may get from it. Such benefits may be aesthetic, behavioral, educational, financial or some combination of these gimmes. A notable example: adults with a chronic illness have fun while learning stuff that improves their lifestyle and lowers their spend on medicine. That’s four concurrent, measurable benefits. Another example: investors own a monumentally creative solution while working with a brilliant team on the cutting edge of several advanced technologies as they head for an exit of 20x their original stake. That’s four concurrent, tangible benefits. According to my projections, Humaginarium is valuable.
Still, the way I think about it, value is not enough. Humaginarium also has to be worthy. This is nuanced, please bear with me. I associate worth with merit. Unlike value, merit isn’t what people take out of Humaginarium, but what they plow into it. Whether they’re a founder, employee, advisor, investor or business partner. merit is the quality and excellence they impart to the venture. This principle even applies to consumers who are often cutthroat when it comes to spending their hard-earned dough. They want more than their money’s worth! So I unlocked the front gates by welcoming consumers into Humaginarium for free; not just into the foyer but free to roam the whole house. The attention they give, the devotion they consequently pay to their own marvelous bodies, the merit they enact when they radiate the insights of Humaginarium, that’s what I mean by worth.
Worth doesn’t show up in a customer value proposition; it’s under the radar of value. Worth shows up in the pride that Humaginarium makes people feel, the honor it bestows on them, the belief that what they’re doing – researching, making, investing, selling, using – really matters in real life and in the brave fantasies of an unshackled imagination.