The Vanishing Value of Valuation

or

What’s the Right First Round Valuation Today?

Honestly, as I sat down to write this, I took a few deep breaths—because what I want to share isn’t a popular opinion:

I don’t think first round valuations should matter (much) to founders.

Hear me out. There’s a point where they do—but usually only when the business is on a thin thread. For a reasonably healthy software business, whether you’re valued at $1 or $1B doesn’t change your day-to-day operations.

I get that this isn’t how most founders are socialized, celebrated, or advised. So yes, it matters—mostly to ego. I’ve got one too. When Valor crossed $50M AUM, I was thrilled. But in the end? It’s just another number. It’s the meaning we assign to it that gives it power. Same with valuation.

So if you’re closely attached to your valuation, here are three frames that might help you think more usefully about where you stand:

Frame 1: Tech Divinity

Let’s start at the top. Thinking Machines Lab, founded by former OpenAI CTO Mira Murati, raised a $2B seed round at a $10B post-money valuation, led by Andreessen Horowitz.

Mira didn’t raise with a pitch deck. She raised with her résumé, her impact, and her legacy. That kind of valuation is reserved for what I call Tech Divinity—founders whose proven record spans decades of meaningful leadership, innovation, and alignment with power. You can count these people on one hand. Mira has earned the divine right to lead at scale.

Frame 2: The Pacesetter

Next, let’s look at Lyra, an AI-native Zoom competitor. This team raised $6M at a $40M valuation. Why? They went from $20K to $700K revenue in six weeks.

That’s Pacesetting. Pacesetters don’t have long résumés with OpenAI or Tesla—but they have early data and traction that’s too good to ignore. Lyra’s growth screamed: we know how to build, and we know how to sell. That kind of clarity gives investors confidence that the founder team is executing at a level usually seen post-Series A.

Frame 3: The Builder

Now, what if you’re building something that customers love, but you’re not showing the traction of Lyra or carrying the global credentials of Mira? That’s where most founders are—and it’s still a strong place to be.

At this stage, investors have to lean in. We have to work harder, run the math, and look for market signals to help us value your vision. That’s where the Builder’s Frame lives. We know your dream is priceless—but pricing it fairly, and funding it wisely, is our job.

What Does Matter in a First Round?

1. Do you have control of your company? (Founder-led board)
2. Is your investor values-aligned with you? Misalignment here causes more friction than any valuation ever could.
3. Do you have enough capital to reach the next meaningful milestone? (In product, customer traction, revenue)
4. Is your valuation so high that it may block your next round?
   With nearly 30% of rounds today being down rounds, your next investor must find you reasonable.

Your team can’t eat valuation. Your vision can’t be replaced.

First Round Valuation ≠ Validation

I shared a term sheet last week with a founding team who passed—because my valuation was $2M below their “perfect number.” I walked away wondering: would this same team walk away from a $98M acquisition because it wasn’t $100M?

Let’s not confuse valuation with validation. There are only two real validation points:

• Daily validation: Customers choosing you, faster and more often
• Market exit validation: A price the world is willing to pay

Everything else? It’s just momentum-building. And momentum doesn’t come from a spreadsheet—it comes from courage.

The Real Signal

The only thing that moves markets—truly moves them—is a founder’s vision catching fire in the real world. Your courage to build something better is the only validation that matters. You’ll see the proof of it at exit.

At Valor, we back that signal. Not the noise. If you’re a builder looking for a VC like that, share your vision with me right here. You’ll get fast feedback thanks to our AI Vic, short for–you guessed it–Victory. Here’s to yours!

-Lisa Calhoun