You have a great idea, perhaps a brilliant one. You may have the beginnings of a prototype and perhaps a partner in crime or two. You’re officially an entrepreneur at the helm of a company. But what is it worth? Answering that question can be difficult. And an exact value may ultimately depend on what potential investors think. But the investors and entrepreneurs we talked with offer useful yardsticks that can help you put a dollar figure on your fledgling startup.

Setting the valuation for an established startup is relatively straightforward, even if it can spark arguments and disagreements. At least there’s revenue, cash flow, growth rates and other financial metrics to help decide its paper worth.

But what if a young tech company has little or no revenue and maybe not even a prototype?

“At the very earliest stage of any new venture, it’s all about hope and not metrics,” says Jason Mendelson, a founding partner at the Foundry Group, a venture firm based in Boulder, Colorado, and the managing director of Techstars.

So how does a founder — or investor — put a value on that hope and potential?

Using a comparable company analysis

The most basic valuation method borrows from the playbook used by realtors, who assess the value of a home by looking at “comps,” or comparable homes. Mendelson recommends establishing a startup’s valuation that is “on scale” with those of other early-stage companies. The more similar the startup — be it its sector, location or potential market size — the better.

Fortunately, comps are easy to come by. The law firms of Fenwick & West and Cooley, for instance, both publish quarterly VC financing reports based on deals they’ve seen. The median dollar worth of a seed deal that Cooley saw in the first quarter of 2019 was $8 million. The median Series A deal had a pre-money valuation of $20 million.

Even so, not all startups that are little more than a few engineers working on an idea sketched out in a PowerPoint slide deck are the same. “We laugh at venture firms that use spreadsheets for seed and Series A deals for valuations,” says Mendelson, co-author with his long-time partner, Brad Feld, of the book, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist. “There’s just not enough data.”

How much money you need?

As a consequence, investors often turn to another method: they reverse engineer a startup’s post-money valuation based on the amount of cash a company is seeking and the ownership stake the investors need to warrant their time and money.

“I need an ownership stake big enough that I can justify to my investors taking a board seat and …