I think too many entrepreneurs come out hot and say they're raising an XYZ valuation when that should just be a natural conversation with investors. Typically, the valuation can somewhat be backed into based upon the expected round size.

If there are competing term sheets, then there is negotiating power to push investors up. But the top priority should be optimizing for the best investor and speed of closing, not the price. Some founders may even take a lower valuation because it's with a better investor (aligned values, strategic value, etc.)

The only time negotiating hard is necessary is when i) there are terms that could hurt the company, ii) or giving up too much equity, or iii) control becomes an issue. But in general, optimizing for a valuation is a rookie mistake. The best founders optimize for speed, closing the round, and the right people.

If capital isn’t a constraint, then there is leverage, which is a great position to be in. Someone wants to invest, but unless the price is attractive enough for the founder, there is no reason to accept the capital unless there is much more that comes with the investment. Creating scarcity opens the door for negotiating the valuation. If the investor really wants equity, they have to pay up or spend a lot of time building social capital to earn it.

There is a push and pull where you don't want to take money at the wrong valuation. If you do, it will linger in your mind that you made the wrong decision. There are quite a few different scenarios where you want to toe the line, but I think the overarching theme in general is to optimize for speed and the right people.