How can you determine the value of a startup with no revenue?

Determining the value of a startup without revenue involves looking at its ideas, market potential, team, and any progress made. Comparing similar startups and industry standards also helps

We delve into comprehensive market research to determine the size, growth rate, and trends of the target market. By analyzing market segments, demographics, and potential customer needs, we can estimate the total addressable market (TAM) and the startup's potential to capture market share. Understanding the dynamics of the market helps us assess the scalability and long-term growth prospects of the startup.

Valuing a pre-revenue startup involves assessing its potential and mitigating risks. Investors analyze market potential, intellectual property, and the founding team's expertise. Progress in product development and comparisons to similar industry transactions provide valuation insights. While lacking revenue, investors may project future cash flows through discounted cash flow analysis, albeit with uncertainty. Ultimately, valuing such startups requires evaluating various factors while acknowledging the inherent risks of early-stage ventures.

The determination of the valuation lies in the eyes of the investor. The determining factors and the metrics will be different for each individual investor. Some will gamble on the horse, others in the jockey. One thing is for certain; the marketplace which is the field and its competitors, have to be acknowledged for the size, strength and weakness. This is where the articulation of the founders pitch comes in. If you can get others to see the invisible, they will invest in something that they may have once deemed impossible

Rather than focusing as everyone in the TAM, SOM and similar concepts I would put my focus on two points, what is the number of sales to obtain the operational income and what is the marginal contribution of each additional one. Once evaluated that I would start looking at the TAM, SOM and the relationship between them.

Like I said earlier, some people gamble on the horse, others gamble on the jockey. An executive team is both the marble and the sculptor. Get busy on your pitch, advisory board, SWOT, pro forma financials, documented investment thesis and finally your proof of concept. Included in your pitch should be a clearly articulated: -Purpose of Business -Mission Statement -Problems and Solutions -A “Why Now?” Thesis -Market Depth and Competition - Business Model and Value Propositions - Executive Team Summary - Financials and Exit Strategy And...Don’t get caught up in the dogma of trying to impress your audience with your knowledge of the marketplace. It is equally important that they understand your

I would regard Team Expertise as the top importance for one startup business. The team expertise I deem does not only include strong knowledge and solid experience, but also the understanding and the sight on the development trend of the market, industry and society. If the team could be united to run in the right direction, the success could be expected to come soon.

I will focus on the following metaphor. If founders gave birth to superman and they are no superheroes and they grab to their son not willing to let go or to give it to other superheroes that know how to make the best out of them, I would walk away immediately.

We conduct thorough due diligence on the startup's product or service, evaluating its uniqueness, differentiation, and potential impact. This includes assessing the technology's feasibility, intellectual property protection, and competitive landscape. By analyzing customer feedback, market demand, and early adoption indicators, we gauge the product's potential to address unmet needs or solve significant industry challenges. Additionally, we assess the scalability of the product and its potential for expansion into new markets or applications.

The only person qualified to confirm this trait is the customer. The way they validate this trait is by giving you money. Anything else is handwaving.

My first question would be is it the right time for it. My second, are there any buyers for it and who they are, do I know their behavior. But first and always first how much?

I would analyze if the business models adds value to that business and to others (potential buyers), if that value is perceived by the client and if the price correlates with it.

We scrutinize the startup's business model to understand its revenue generation strategy, cost structure, and scalability. This includes evaluating pricing strategies, sales channels, and customer acquisition plans. A robust and sustainable business model demonstrates the startup's ability to monetize its offerings effectively and achieve profitability over time. We also assess the startup's ability to adapt its business model to changing market conditions and scale operations efficiently as it grows.

I don’t believe too much in IP and patents, just a small change and that protection is gone unless in certain key areas like military industry where there are superior interest protecting that product.