Startup valuations are highly subjective numbers, making the valuation process one of the most difficult aspects of fundraising for your company. Entrepreneurs focus more on future potential rather than the current state of their product, while investors focus on the amount of capital needed to ensure future profitability. Therefore, entrepreneurs are more likely to overvalue their company while investors are likely to undervalue it.

Valuing your startup is much more complex than comparing your numbers to those of potential investors and meeting in the middle, so we’ve put together some tips to make the process easier.

1. How Much Your Startup Wants vs. Needs

Before determining exactly how much your company is worth, figure out how much money is required to succeed now and in the future. Many companies take the ‘lean startup’ approach and get to this point by surviving on the bare minimum for years. Knowing the amount necessary to keep your company afloat will help you determine a range of numbers you’re willing and able to accept. After establishing this range, you can refine it by focusing on the following factors.

2. How Much Control You’d Like to Retain

Deciding how much control of your company you’re willing to lose is one of the most difficult aspects of startup valuation. Investors won’t be attracted if you refuse to give them any equity in return for their investment. However, the amount of equity you give investors must also align with your requirements such as keeping control of your company. Many startups give up 10-20% equity in return for seed investments. Unless you have a good reason to do otherwise, stick with this range when calculating your valuation.

3. How Much Experience is Found Within Your Venture?

Capitalize on your team’s experience when valuing your startup. Demonstrating the depth of your background will help convince investors you’ve got what it takes to successfully move forward. In some cases, startups are acquired for the independent value of the talent behind them rather than their customers or products. If your company has one of the best developers or executives in the business, include it in your valuation. Because experienced and well-known teams are more valuable to investors, it’s crucial to avoid undervaluing your company by failing to emphasize the talent and experience of its key members.

4. Account for Your Startup’s Assets

Make sure to account for tangible and intangible assets, as intangibles are often overlooked when valuing startups. Whether your intellectual property consists of a patent or copyright, servers, or a domain name, having a lot of IP could push up the valuation of your company. If this IP gives you a competitive advantage, it should be assigned a higher value. Use other companies with similar IP as reference points to give yourself a better idea of your IP’s value.

5. Do You Have First-to Market Exclusivity?

Large barriers to entry enable products to reap greater benefits from first-to-market exclusivity. Therefore, your company will be worth more to investors if it can remain the first and only product in the market for a long period of time. Investors are more interested in complex products that won’t have copycats nipping at their heels shortly after launch. Whether they’re due to time, money, or hard work, highlight each of your product’s barriers to entry in order to make it more attractive to potential investors.

6. Consider Comparables

Look at what similar companies in your industry are selling for. You’ll have to estimate and compare differences in overall amounts and attributes, but these numbers can be of use if compared objectively. Lawyers and accountants are good resources to consult if you have a high-tech or high-growth startup, although you should make sure you receive unbiased advice from trusted resources regardless of your industry.

7. Projecting Your Startup’s Value

In addition to being a highly difficult and subjective step, predicting the future value of your company is also perhaps the most important, as many believe you’re not worth anything at all until you’re profitable. It’s easier for late-stage companies to estimate future potential because they can base their predictions on a greater number of past experiences. However, that doesn’t mean early-stage startups are incapable of making educated projections. Whether your company is in an early or late stage, your financial projections become more believable when you support them with solid data. Developing a business plan will help you develop these projections and make them more believable to investors.

Be careful not to overestimate the value of your startup, as one day you’ll have to deliver on the promises you make. Breaking a promise not only disappoints investors, but it also lets down major players who have become close advisors or board members. On the other hand, you also want to avoid undervaluing your startup. Present the number you believe you’re worth and back up your valuation with sufficient data. If your numbers are accurate and well founded, you should have no problem getting investors to agree with your projection.

8. Explore Your Startup’s Customer Base

Investors will be more interested in your company if people are already paying for your product. If you have paying customers, show how much they’re currently worth and provide a customer lifetime value. If your early-stage startup has yet to acquire customers, explain how you’re going to get them on board. If you plan to build a customer base by first providing your services for free, educate potential investors on how you’ll turn these free trials into paying customers. Regardless of whether or not people are currently paying for your product, investors are more likely to be interested if they your plans for future monetization.

9. Evaluate the Buzz About Your Startup

Hype is an important and often overlooked element of the valuation process. Every bit of press and recognition you’ve received adds value to your company. A buzzworthy company attracts the attention of more investors than a company struggling to get noticed. Although it’s difficult to assign a specific dollar amount to mentions by thought leaders or other write-ups, this recognition helps to justify a higher valuation.

10. Communicate Supply and Demand in Your Market

You can learn a lot about your product’s market by thinking of it as a simple supply and demand curve. A product that is first-to-market will have all the demand to itself, making it more valuable to investors. This value increases if it can remain the only product in the market for a longer period of time. Conversely, a product entering a saturated market must share that demand with other companies.

However, being first to market carries no weight if there is no demand in that market. Make sure there will be a real demand for your product, or you’ll have a hard time convincing investors it has any value at all. Whether this means changing your product, targeting a different market, or a mix of both, it may be necessary to achieve a higher valuation.

Following these valuation guidelines will help you strike the balance between the amount you believe your company is worth and the amount investors are willing to put forth. By providing an abundance of complete and accurate information, you’ll build the interest and trust of potential investors while proving you deserve the amount you’re asking for.