What are the terms in valuation?

What are typical terms (specifically discounts and valuation caps) for pre-revenue, seed stage SaaS startups as of June 2014?

• Answer:

  Really depends on where you are at location-wise and development-wise. I've seen pre-product ideas with a great team in the valley get valuations in the 6-8m range and finished products with a great team outside of the valley get valuations in the 2-4m range. Pre-revenue doesn't say a whole lot, milestones/metrics around other traction or level of development does mean more from a comparison perspective. There is some data in a variety of blog posts, there is data on AngelList, CrunchBase, and so on to help guide you there. If you plan your valuations around the money you need to get to the next milestone you are going to be much better off than trying to plan your valuation around how much your neighbor got for their startup. Angel/Seed rounds - should get you from idea to working product and initial revenue. At this stage you should really formulate yourself as a company in how you operate on a monthly/annual basis, how you communicate with investors, and so on. 12-18 months Series A - valuation should be higher than the last round. Should get you to the next set of milestones (customer count, or customer sizes, or customer revenue, or customer locations, or markets, or certain feature sets). Series B - valuation should be higher than the last round. Should get you to the  next set of milestones (customer count, or customer sizes, or customer  revenue, or customer locations, or markets, or certain feature sets). Series C - valuation should be higher than the last round. Should get you to the  next set of milestones (customer count, or customer sizes, or customer  revenue, or customer locations, or markets, or certain feature sets). Could also be where you are getting acquired, looking at positive net income in the foreseeable future, or an obvious need for future rounds. Notice the importance of scaling the valuations as you raise each round. This is incredibly important for your investors and capital structure of the business. Each set of milestones should be evolving your customers, the product, and the business. You should be getting more sophisticated with understanding each of those things.