Regardless of what stage a startup is at, there are certain qualitative factors that VC funds always consider before investing. For example, VC funds will always consider the health of the market sector that a startup is operating in. If it is operating in a sector with sluggish returns, then that will negatively impact the valuation they place on the business unless they believe the startup is offering something disruptive or transformational.

The reverse is also true. If a startup is operating in a hot sector, then they will likely benefit from a higher valuation. In this case, revenue and EBITDA multiples will typically be used at an earlier point compared to other startups.

Lastly, VC fund investors tend to also place a premium on startups with successful founding teams that have a track record of good previous exits, or if the startup is operating in a large and or highly fragmented sector with high growth i.e. growing at double digits.