The real answer (that not many people are willing to say), is this: you go outside, raise your thump towards the sky, imagine a nice number, and that's the valuation. It's called the thumb valuation.
But seriously, there is no "official" accounting method to evaluate a startup that is not already selling, and even then the sales don't necessarily indicate the value of the company.
In any event, some of the below are good indicators of value:
1. Do they have a patent?
2. Have they already developed the technology? Is it working?
3. Do they have sales or traction?
4. How much is each sale/signup/download costing versus how much are they making (going to make) from each of these users?
5. How long has the team been together? If they're offering a technological solution, is the CTO a member of the team, or an external company?
6. Are there any similar companies providing similar services? If so, check how much money these companies have raised so far and at what value, or research their sales/results so far (I am happy to teach you how to do so - almost all the information is available online).
7. If prior investments have been made, check how much he/she invested each time?
8. Do your research on the market and potential.
You then take all the above, and reach the value of the company, based on which you are asking the investment for.
9. There ARE some companies that do startup evaluation, but these are relatively new (about 4 years) and usually use most of the above methods.
I've successfully helped over 350 entrepreneurs, startups and businesses, and I would be happy to help you. After scheduling a call, please send me some background information so that I can prepare in advance - thus giving you maximum value for your money. Take a look at the great reviews I’ve received: https://clarity.fm/assafben-david