A VC in Vacationland

English: Merovingian coin valuing at a third of a golden sou. Found in the effigy of St-Eloi(c. 588 – 660), now in the Musée d'Art et d'Histoire de Toul. Nederlands (Photo credit: Wikipedia)

One of the quandaries faced by entrepreneurs is how to value their start up. Dave Berkus details a popular method in his Blog, which increases valuation if a start-up reaches certain value creation levels.

Bill Payne has an interesting 2012 survey of typical valuations given investments by leading angel groups in the U.S., another way to gauge if your estimates are realistic. The current average for pre revenue companies is between two and three million dollars.

Finally, the Kaufman Foundation has a useful guide on valuing pre revenue companies, with lots of detail on alternative methods and approaches.

Valuation of start-ups, however, is a fine art that should involve your mentors, lawyers and discussions with various angel investors before settling on a number, or just using the basic Berkus methods. The more advice, the better.