Breck, picking your investors carefully is great advice. And it sounds as though you may have indeed found a gem. One thing to be aware of, however: the most important point is not that valuation be low (to attract investors) or high (to retain equity for the founder). Instead, it's like Goldilocks and the Three Bears: valuation needs to be Just Right.
If it's too low, as your investor pointed out, you will soon be diluted to the point that you may not have the appropriate incentive to keep working 24/7 on your dream. On the other hand (and, in my experience, a more typical problem by a factor of 10) if you set the valuation too high (even if you have a friendly angel willing to do it at that number), you are setting yourself up for a disaster in the following round.
Because if the market conditions (or company experience) at that point is not perfectly aligned for an up-round, either you won't be able to raise funds, or else both you and your investor will get seriously hosed.
Bottom line: make SURE as best you can (by checking the market and talking to other experienced investors) to get your valuation Just Right!
All Comments
If it's too low, as your investor pointed out, you will soon be diluted to the point that you may not have the appropriate incentive to keep working 24/7 on your dream. On the other hand (and, in my experience, a more typical problem by a factor of 10) if you set the valuation too high (even if you have a friendly angel willing to do it at that number), you are setting yourself up for a disaster in the following round.
Because if the market conditions (or company experience) at that point is not perfectly aligned for an up-round, either you won't be able to raise funds, or else both you and your investor will get seriously hosed.
Bottom line: make SURE as best you can (by checking the market and talking to other experienced investors) to get your valuation Just Right!