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CK
@cklosangeles
Q: How do you define your company's valuation when you don't have any product or traction?
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CK
@cklosangeles
For a pre-product, pre-traction team, valuation is almost completely arbitrary, i.e. a made up number - the biggest driver in this case would be "market rates" or "comps"
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CK
@cklosangeles
Assuming there's no meaningful traction, the biggest factors would be the market condition (bull vs bear startup funding market) and the team composition
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CK
@cklosangeles
In the same SAFE round, a 3-person team that's former Google and Meta engineers developing a new video creation LLM model could get $20mm premoney value. A solopreneur working on a consumer social app could get $2mm premoney value.
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CK
@cklosangeles
So pay close attention to the market and the comps. Keep in mind this works maybe only for the first check; from there, it's all about traction and metrics.
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Manator.eth 🎩🍖💊🍓
@manator
Many VCs use a scorecard with predefined values for each checkmark like Experinced team etc. Pointless to build a financial model for such a startup.
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