Intro.
#The Book's Own Example — What Happened 18 Months Later
주의
"There was a real case of a startup that successfully raised at a notably high valuation, only to burn through the funding within eighteen months. It fell well short of its target metrics, failed to close its next round, and shut down." (Lee Taek-kyung, Ch. 6 — Valuation and Equity Dilution)
Unpacking the shutdown scenario compressed into that one sentence looks like this. Every stage traces back to a single starting decision: raising at an inflated valuation.
| Timing | Event | Outcome |
|---|---|---|
| T+0 months | Closed Series A at ₩20B against a fair-value market of ₩10B | Secured ₩5B in funding |
| T+6 months | Pressure to hit KPIs that justify a ₩20B valuation | Team's burn rate spikes |
| T+12 months | Monthly opex at ₩400M; runway cut from 18 to 14 months | Starts the next round |
| T+15 months | New-round VCs flag that "the last round's valuation is hard to justify" | Shifts to down-round negotiations |
| T+18 months | Down-round talks fail; cash runs out | Shuts down |
02
#The Four-Stage Mechanism From a 200–300% Valuation to Shutdown
The intuition that "a higher valuation causes no problems" is wrong because a high valuation automatically sets off the following four stages.
- Stage 1 — KPI pressure — a ₩20B valuation means you now have a year to produce the KPIs that justify it. Payroll and marketing burn rate rise automatically
- Stage 2 — accelerated cash burn — funding meant to last 18 months shrinks to 12–14 months of actual runway
- Stage 3 — down-round pressure on the next raise — new VCs conclude "the last valuation was inflated" and negotiate toward a lower one
- Stage 4 — refusing the down round → negotiations collapse → cash runs out → shutdown
TIP
"If you raised at a higher valuation than expected, you need to give yourself more breathing room, not less." (Lee Taek-kyung, Ch. 6) — a higher valuation demands both more time and a bigger KPI leap. Fail to slow your burn rate accordingly, and you're automatically on the 18-month path to shutdown.
03
#The 130% Ceiling — Only Achievable When Demand Is Genuinely Hot
So where does a reasonable negotiating range actually end? Lee's book is specific about this.
| Market Demand | Negotiable Ceiling | Example (Based on a ₩10B Fair Value) |
|---|---|---|
| Very hot (multiple VCs competing) | 130% | Up to ₩13B |
| Moderate demand | 100% or slightly above | ₩10B–11B |
| Low demand | Raise doesn't happen at all | No negotiation to speak of |
| Overreaching ask (200–300%) | Every investor walks away | Negotiations collapse |
주의
"Some founders treat valuation as a matter of pride. But valuation is a waypoint, not the final destination — getting too greedy over it isn't a good idea." (Lee Taek-kyung, Ch. 6 — Valuation and Equity Dilution, p. 203) — ask for more than 200% of the standard range for your stage, and you're out of the deal funnel immediately.
04
#Standard Valuation Ranges by Round
You need to know the standard range for your own stage before you can calculate what "130% of fair value" even means. Here's the general range in the Korean market.
| Round | Standard Valuation Range | 130% Ceiling | Above 200% = Instant Pass |
|---|---|---|---|
| Seed | ₩500M–4.0B | ₩520M–5.2B | Above ₩1.0B–8.0B |
| Pre-Series A | ₩4.0B–10B | ₩5.2B–13B | Above ₩8.0B–20B |
| Series A | ₩10B–25B | ₩13B–32.5B | Above ₩20B–50B |
| Series B | ₩25B–75B | ₩32.5B–97.5B | Above ₩50B–150B |
| Series C | ₩75B–150B | ₩97.5B–195B | Above ₩150B–300B |
TIP
These ranges aren't a fixed standard — they shift with market demand, competitive dynamics, and VC fund timelines. But treat "more than 200% of my stage's standard range" as the line past which almost no VC will even negotiate.
05
#What a "Valuation Is My Pride" Tone Signals
Of all the signals a VC picks up on in your negotiating tone, the most dangerous is "I won't budge on valuation" delivered as a matter of pride. Modeled on the Lee Taek-kyung persona, here's the inference that follows.
- "We should get at least what Company X got" — a bare comparison. Casts doubt on your judgment, since you don't actually know that company's circumstances
- "If we can't get this valuation, we won't raise at all" — ignores your own cash runway. Reads as neglecting the actual business
- "Valuation is completely non-negotiable" — casts doubt on your fitness as a long-term partner. Investors expect the same rigidity in every future negotiation
- "Several other VCs valued us higher" — an unverifiable negotiating claim that erodes trust
주의
Negotiating tone kills deals independent of how attractive the business actually is. The path runs automatically: "attractive, but questionable judgment" → "hard to see as a long-term partner" → pass (Ch. 6).
06
#The Negotiating Tone That Actually Works, Per the Lee Taek-kyung Persona
On the flip side, here are the four tones that earn credit with the Lee Taek-kyung persona at the negotiating table. All four rest on the same premise: valuation is a waypoint, not the destination.
| Favored Tone | Example Phrasing | Why It Earns Credit |
|---|---|---|
| Lead with the amount needed | "We need about ₩700M to run for 18 months." | Signals that valuation is negotiable |
| Know your stage's standard range | "We'd like to negotiate within the standard seed range." | Signals sound judgment |
| Acknowledge the trade-off | "A higher valuation now just raises the bar for our next round." | Signals you'll be a good long-term partner |
| Prioritize fit | "Finding the right-fit investor matters more to us than the number." | Relationship-first framing that builds trust |
Summary.
#Self-Check Checklist
Six things to check right before you enter a valuation negotiation. If any answer is "no," reset your negotiating tone first.
- Do you know the standard range for your stage (e.g., ₩500M–4.0B at seed), and did you set your opening ask inside it?
- Does your target valuation stay under 200% of fair value? (Go higher, and negotiations risk collapsing outright.)
- Do you lead with the funding amount you actually need (18 months of runway is the recommended target), letting valuation follow from that?
- Have you stripped bare comparisons to other companies out of your materials?
- Does your business plan spell out the trade-off that a higher valuation now raises the bar for your next round?
- Does your first-meeting material reflect a "the right-fit investor matters more than the number" tone?
CTA
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