Ask HN: How to calculate initial valuation of start-up?

7 pointscitizenkeys5 comments

How do you calculate the initial valuation of a start-up that's just co-founders and doesn't yet have a product, income, or assets?

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Early stage startup valuations are a guessing game at the best of times, but if you haven't even got as far as a knowing your product, then you'll have a particularly difficult job in justifying a valuation of any amount.

So I would say, however much you think you can get away with.

Can you give us any more context? For what purpose do you need a valuation?

I'm trying to understand how seed-money investors do this. I can understand valuations based on a real set of books, with assets and income. But how does a seed-money investor like Y Combinator calculate the worth of a company with just co-founders and an idea?

PG talks about it briefly in this clip (currently on the front page): http://www.youtube.com/watch?v=wMBTRf1kgm8

They wing it or use a convertible note. It really is that simple.

http://venturehacks.com/articles/seed-valuation

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