Deep Tech Valuation: How Investors Price Pre-Revenue Science

Valuing a pre-revenue deep tech startup is fundamentally different from valuing a software startup, because traditional metrics (revenue multiples, ARR growth) are unavailable. Deep tech investors use a combination of: Technology Readiness Level (TRL) — a standardised 1-9 scale measuring technology maturity. Companies at TRL 3-4 (proof of concept in laboratory) are typically valued at US$2-5 million; companies at TRL 6-7 (prototype demonstration in relevant environment) at US$10-30 million. IP Portfolio Quality — the number, jurisdiction, and defensibility of patents, evaluated by a patent attorney as part of due diligence. TAM x Probability of Technical Success — a risk-adjusted market sizing approach: the total addressable market multiplied by the estimated probability that the technology will work at commercial scale. Comparable Transactions — what similar deep tech companies at similar TRLs have raised capital at, adjusted for sector. The wide valuation dispersion at the same TRL reflects the importance of team quality and IP defensibility.