The Wisest Entrepreneurs Know How to Preserve Equity

YC's advice for founders is the opposite: don't optimize on valuation (or valuation cap, for debt)-- whether you give up an additional few percent matters less than other factors, like how much value the investors add or the time and effort spent completing the deal (and not working on product).

This is related to YC's argument for why they're worth their 2-12%: http://paulgraham.com/equity.html

The article suggests that you should fight for aggressively high valuations.

There is a flipside to this. Setting your valuation aggressively high only benefits you if you win big. As Chris Dixon and others have warned (e.g. http://techcrunch.com/2011/06/08/fred-wilson-platforms-valua...), a too-high valuation can lead to a down round if you don't meet expectations. This can harm your company and make it harder to raise your next round.

So following the advice of this article is a risky gambit. You can't anticipate all roadblocks or obstacles that could prevent your company from growing as much as you intended when you raise that money. You can't control all external factors, e.g. the economy. It's your choice if you want to roll the one-hundred sided die.

That's where I quit reading. The time for most companies' IPO comes just slightly after pigs fly over a frozen hell. Is strategizing your way to a personal multi-billion dollar exit really how you should be running a company in the early days?