The value in our startup in an acquisition is usually a fraction of what we think it is — not a multiple.

That's not because our startups lack value; it's because we often misunderstand how that value actually gets calculated. In the past 30 years, I've spent a tremendous amount of time on both sides of these transactions, both as a Buyer (we bought 6 companies at Startups.com) and as a Seller (I've sold 5 of my own companies).

What I've learned is that Founders have really unrealistic expectations of how our startups are valued at the time of a sale. Frankly, it's not because we're not smart, it's because there simply isn't a lot of guidance on how startups get valued at all.

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