How VCs Value CompaniesHow do you measure the value of a pre-revenue company? Here's a bit of insight.

Over the years, I've heard plenty of entrepreneurs and VC colleagues talk about pre-product, pre-revenue and pre-profit valuations as if they can all be lumped into distinct categories. But while this type of analysis is part of the art and negotiation of early-stage company valuations, it is far from formulaic.

When I hear VCs spout generalities such as "The going rate for post-product, pre-revenue companies is $5 million to $7 million," I tend to think of Oculus VR, which was acquired by Facebook for $2 billion before its first product hit the shelf.