A common refrain in the investor community these days is, “I invest based on the jockey, not the horse.” Many investors invest based on their confidence in the management team over whether or not they think an idea is good.
When it comes to valuing a startup, some people say it is more art than science or that you are really taking a shot in the dark. Many angels will start with where the company is today and try to determine a valuation based on the current condition of the startup. They may start with a low valuation and add to it depending on where the company is in its process – i.e. Do they have early revenue? Do they have stable customers? Are they profitable? etc.