WSJ Asks: Are Startup Valuations Art or Science?

One quote I liked: 

“It’s rule-of-thumb stuff,” she says. “VCs are sophisticated and they are doing it full time, but they make mistakes.” But sometimes, the results are life-altering — possibly like Heitzmann’s investment in Pinterest, if everything goes right.

So- “rule of thumb” stuff.  I can’t tell you how many times a potential client says “well, I don’t really want a valuation, can you just tell me a rule of thumb.”  VC’s are super experienced at what they do and often have a gut feel for valuation.  But as the author notes, still get burned.  

What do you think?  Art or science?  Feel free to weigh in. 

 

Just how DO you value something “pre-revenue?”

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