>> One reason is the team behind the app has already proven its worth. I just heard of a startup raising money at a few million dollar valuation with something

>> One reason is the team behind the app has already proven its worth. I just heard of a startup raising money at a few million dollar valuation with something any programmer could create in one month or so. Surely they understood a business need (which I later found referred to in a two-year old news article) that I was not aware of before. Yet, x million valuation for it?! To make it worse, the founder says that he'll hire about fifteen-twenty folks and that by itself will raise valuation to a few tens of millions. Someone else also told me that the people who are involved in due diligence for a company's valuation are often merely comparing it to previous startup exits in the same space and at the current size of the company (plus of course largely made up projections). Looks like there are not so commonly known rules of thumb used for valuation that are being exploited by those who know.