Mark: Generally, the 'ask' is how much you're raising and what the pre-money value is. As an investor, I want to know if the founders are in a fairy tale land or living in the real world. As a founder, it's important to remember that your valuation is not what you want to own at the end of the day, rather it is what your company is worth.

Tom: Very rarely will an investor use the startups' valuation for investing. Investors will come up with their own valuation based on past experience and use that to invest. Valuation is not a precise science. So startups and investors will need to meet on several occasions to determine a fair valuation. If the parties can't meet then the startup will need to go elsewhere, simple, and painful, as that.