For SaaS or PaaS startups, valuation is often considered as combination of art and science. In case of B2B SaaS companies, financial metrics make more sense since the target market and pricing strategy has to be defined, which is not always the case with B2C companies, especially social companies such as whatsapp, instagram, facebook. In such cases, valuation is often based on “eyeballs”- number of users acquired by platform.
In the event of valuation, startup can be roughly categorised in two categories. First is the seed stage, second is the growth stage. Each phase implies different ways of valuation.