Do competing offers get me a better price?
With one or two offers, deals closed a median 50% below the ask. With three or more, 40%.
More offers, a smaller valuation cut
Correlation, not cause.
We grouped 140 deals by how many offers the founder received and took the median valuation cut in each group (the median is the middle value). With one or two offers, deals closed 50% below the ask. With three, the cut fell to 40%, and it stayed at 40% with four or more, across 30 deals.
When several investors want in, they adjust their offers to win the founder, and the price moves towards the ask.
This is a correlation, not a cause. Strong pitches attract more offers and also justify a higher price. You cannot create competition on stage, but you can make it count: when more than one offer arrives, say so and compare them openly.
What was said
Ahmed Tarek Khalil
Revised offerMy offer is 2.5 million EGP for 30% equity, which is better than all of theirs.
Kamli Beauty (كاملي بيوتي) · S5 E10 · 10:56 · Paraphrased
Ayman Abbas
Revised offerI'll raise my offer to 4 million EGP for 51% equity.
Carpetivity (Carpetivity) · S3 E2 · 22:06 · Paraphrased