Find a valuation for a startup is a thorny and emotive subject. How much is the idea worth? How much is the founder(s) working for many months without any income worth? How much is your advisory board worth?
So I enjoyed coming across this keep it simple approach from Genoa around 1100AD
From David Abulafia, The Great Sea, p277
Often … merchants engaged in what they simply called a societas, or ‘partnership’, where a sleeping partner would invest three-quarters of the total and his (or her) colleague would invest one quarter, while also agreeing to travel to whichever destination had been agreed, and to trade there. On his return, the profits would be divided in half … [A]nother arrangement became even more common: the commenda, where the travelling partner invested nothing more than his skills and services, and received a quarter of the profits.
Using this model you come out with the “sweat” part of the valuation being worth between 25% and 33% and the “investment” part representing the rest. Of course this doesn’t take into account that in 1100 being the travelling partner put you at risk of serious bodily damage rather than just a few all-nighters and stressful pitches. Nor does it take into account the fact that there are bound to be differences between fitting out a ship and cargo for a sea voyage in 1100 and turning a software MVP into a self-sustaining business.
But (coincidentally?) the relative weights between cash and sweat do feel about right.