Deciding how to value pre-revenue companies is hard. There are many signals to process, and even after you’ve taken all of them into account, the final estimate is as much art as science. Deciding how much a startup should be worth is like deciding how much a one-of-a-kind painting should be worth: there are guidelines to move you in the right direction, but in the end you’re basically making an educated guess. What’s worse, you don’t truly know if your guess was good until long after you’ve made the investment. Despite that bleak disclaimer, there are heuristics for calculating the value of a startup – even one that has yet to make a dollar in revenue.