> So say that I have given a quote as a consultant for $100k worth of development. They can only afford to pay $50k. They claim their seed round gave them a val

> So say that I have given a quote as a consultant for $100k worth of development. They can only afford to pay $50k. They claim their seed round gave them a valuation of $10M, so therefore they offer 50k / 10M = 0.5% in equity in addition to the $50k cash. This is why the valuation matters - it is directly determining the amount of equity in the offer. The valuation matters, of course, but if I was in your shoes, my biggest concern wouldn't be validation of the valuation: 1. A $10 million valuation is well above the median valuation for seed stage companies[1]. What's strange here is that the startup doesn't even have a technical team, so what was the justification for the valuation? 2. Despite the fact that this company was somehow apparently able to raise at a premium valuation, it apparently didn't raise enough to pay for the development that's needed. That implies it raised too little. Whatever the reason, that's a huge red flag. In a scenario like this, I wouldn't consider equity to be at all attractive. [1] http://www.theventurealley.com/series-seed-the-new-series-a/ http://www.theventurealley.com/series-seed-the-new-series-a/