In practice, the investor usually considers the valuation from a completely different view point. Negotiations with the founders give the investor a fuller picture of the company’s needs for financing. After this the investor considers what would be the best ownership structure after the financing round, meaning how big a stake does the founding team need to be left with in order to keep them motivated. This calculation, called the pre-money valuation, estimates the value of the company before the financing round.
My own experiences from the startup field indicate that a market price level has begun to form for startups in Finland. In most cases that I’ve seen, a company that has a great idea and team behind it but not much to show of actual implementation, has been valued at 500.000 € - 1.000.000 € before the financing round.
Naturally each case needs to be considered separately: some companies should not be invested in even at a low valuation, whereas for some companies the valuation could be a lot higher than the range mentioned above.