"Approaching the question?" How about just answering truthfully? What would someone have to offer, assuming nothing else about the deal?
If you put some high number no one would offer, you're not really answering the question, are you? If you say you'd need 20 million, I'm going to ask: so if someone offered 19, you'd say no?
I think I've stated our question poorly. It's not that we don't want to answer truthfully, it's that we're having a hard time converting what we want into a dollar figure.
Here's what we want: We want to work on cool problems. We want to make software that solves problems. We want to make enough money to live comfortably. We want to love our work.
Hopefully, in three months, we'll have some of what we want, and be on track to get the others. Someone buying the company from us may change those things in lots of different ways, depending on the situation.
Our question is, how do we quantify those wants? It's not clear to me how to do so. One approach may be to quantify other factors that would lead to us getting what we want - such as the amount of money we'd want to start another startup.
I could just give something in the ballpark, but it wouldn't be particularly accurate. For instance, I could say that giving away the site we love to work on is worth x, but if someone asks me why not x-1 or x+1, I won't have a good answer.
I don't think you have to quantify anything, it's not a matter of science or math -- it's about how much that money means to you.
Just imagine some rich guy with a checkbook. Imagine what the minimum number he has to write in order to take your three month old baby. It's a realistic situation and the guy with the checkbook isn't going to pay you what you "want" he's going to pay you what you won't say "no" to.
Assume it's a cash only deal, but figure that if it's Google you'd go even lower on cash if it meant you have a sweet job and salary -- that's obvious.
Hmm, I think with that argumentation you'd get a slippery slope argument. "If you take 19 Million Dollars, would you say "no" to 18999999$ ?" Of course not, and this argument can be continued. Therefore the value one can state is surely one that gives a rough sense of the amount of money that one would take for the company, a fuzzy value. Of ocurse most people would be willing to take a lesser amount, but when they state the lesser amount, they'd probably take even then a smaller sum again.
And of course if an investor would be willing to invest 19 million than he would probably be willing to invest 20 million as well... after having established the rough amount of money one would take the outcome seems to depend on negotiation skills. And to betray the actual lowest amount one would take might weaken one's own position ;-)
If you put some high number no one would offer, you're not really answering the question, are you? If you say you'd need 20 million, I'm going to ask: so if someone offered 19, you'd say no?