How do I value my pre-revenue startup, and who actually sets the price?
At pre-seed the market sets the price, not a spreadsheet: valuation is mostly a function of stage, team, market size, and how competitive the round is. Your leverage is having more than one interested investor, so run a tight process rather than negotiating one term sheet in isolation. Do not fixate on maximizing valuation; a price you cannot grow into becomes a down round later, which is far more painful than a little extra dilution today.
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The canonical, no-nonsense overview of how seed fundraising works, written by a former YC president who has seen thousands of rounds. It's the single best starting point before you talk to a single investor.
Written by a partner at Blume Ventures, this is the India-specific version of exactly what we're telling founders: valuation is not a spreadsheet output, it is (in Fred Wilson's line the piece builds on) the exhaust fumes of a negotiation about two things, the amount raised and the dilution. It shows the real Indian seed math (a roughly 1 to 1.5M dollar cheque for a 15 to 20 percent stake, back-solving to a 5 to 7.5M dollar post-money) and why the VC sizes the round to get you to Series A, not to please your ego.
Once you accept that the market sets the price, this piece shows you the actual methods investors reach for when there is no revenue to anchor on: comparables from recent deals, the scorecard method, the VC method working back from a target exit, and Berkus. Knowing the frameworks on the other side of the table lets you run a tighter process and read whether a term sheet is priced off real comps or a founder's optimism.
