To keep it simple, market demand determines valuation.
Early stage companies are difficult to price, but generally it's a mix between what the market perceives an investment to be worth and quantifiable metrics such as financials and projections. The strength of the management team, their ability to follow through on their plans, and the total business opportunity also plays a large factor.
Unlike Venture Capitalists or Angel Investors, who traditionally set valuations, we do not benefit from setting the cheapest price possible. Often these investors use their position of capital to negotiate lower valuations in order to gain a larger stake in a company. This can have lasting negative effects on a company and its future success since capital and control is compressed.
Equivesto takes on the role of the intermediary between the companies and the investors. We help negotiate the valuation before a deal is listed. We take careful consideration of both sides interests and create a valuation that is fair and accurate. Our business model is designed for Equality, as we only get paid on successful rounds of investment. Our goal is create a low enough price for investors to be interested, but high enough to help companies reach their goals.