Ask YC: Negotiating with Friends/Family/Fools for the first round.

Hi,

We're about to close a 70K EUR Round with friends (in packages of 10-20K), which we plan to use to test our marketing assumptions, and launching the first city, for a finished product.

Bigger cash seems to be available only with strings attached (e.g. 100k now, 1.5MM later for 40%), and there are few good Angels in Europe.

It's not just hard to pitch, it's much harder to find someone to pitch to.

Our current self-valuation, which we think is very reasonable, even when accounting for interest and risk, is 1.5MM.

How would you guys go for arriving at a valuation with friends?

We're prepared to give them a significant discount, but we'd like to avoid haggling.

Do share your experiences!