Yes it can — startup companies do not just work on revenue for valuation — in fact they very rarely do.
In the recent climate of massive change and innovation the following method is popular: Known as “market multiple”.
One could also argue the value is what the market determines the value to be
Market Multiple
Venture capital investors like this approach, as it gives them a pretty good indication of what the market is willing to pay for a company. Basically, the market multiple approach values the company against recent acquisitions of similar companies in the market.
Let's say mobile application software firms are selling for five-times sales. Knowing what real investors are willing to pay for mobile software, you could use a five-times multiple as the basis for valuing your mobile apps venture while adjusting the multiple up or down to factor for different characteristics. If your mobile software company, say, were at an earlier stage of development than other comparable businesses, it would probably fetch a lower multiple than five, given that investors are taking on more risk.
In order to value a firm at the infancy stages, extensive forecasts must be determined to assess what the sales or earnings of the business will be once it is in the mature stages of operation. Providers of capital will often provide funds to businesses when they believe in the product and business model of the firm, even before it is generating earnings. While many established corporations are valued based on earnings, the value of startups often has to be determined based on revenue multiples.
The market multiple approach, arguably, delivers value estimates that come closest to what investors are willing to pay. Unfortunately, there is a hitch: comparable market transactions can be very hard to find. It's not always easy to find companies that are close comparisons, especially in the start-up market. Deal terms are often kept under wraps by early-stage, unlisted companies – the ones that probably represent the closest comparisons.
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