We're working hard on finishing up our YC application, and we're having a lot of problems with this one: "If one wanted to buy you three months in (August 2007), what's the lowest offer you'd take?" First of all, what if we're not particularly interested in selling the company that fast? Should we just put some ridiculously high number that no one would actually pay? Also, the numbers would seem to vary significantly…
The more we thought about it, the more we realized that we had no idea what the company would really be worth after three months. It was just too hard for us to figure out a number that we could defend. Other people are probably better at this than us.
So instead we thought about why we wanted to create the startup in the first place. In a nutshell, we want to work really hard on cool problems that we love and get rewarded for it. Someone buying our company basically takes this away from us (since we would already be working on something cool that we love, and we wouldn't get to work on it anymore).
So we asked ourselves: how much money would we want to ensure that we could work hard on cool problems we love again? In other words, how much money would we need to go back to square one and start another startup?
For us, we basically decided we wanted enough money to work on any problem we want for a few years, plus enough money to fund our next startup when we come up with an idea we're excited about. That's the best way we found to attach a dollar figure to what we want. You may have other factors to consider, but for us, it worked pretty well.
In any case, thanks a ton for all the good responses and feedback. It definitely helped us.