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Founders often anchoring on high Silicon Valley valuations ruin great deals in mid-market hubs. If your TAM is solid but you have no prototype, expecting a $10M cap right out of the gate is an immediate pass for most sensible angels.
Valuing a pre-revenue startup is 80% team evaluation and 20% market sizing. Forget complex DCF models; look at the founders' track record, domain expertise, and how fast they execute on feedback before slapping a $5M valuation on an idea.
Discusses practical valuation methodologies (Scorecard, Berkus, Risk Factor Summation) used by angels when financial metrics do not exist yet.