Valuation of Startup

Look at the current cap structure and try to forecast how it will change with later funding rounds. Looking at comparable startups is a good idea too, especially looking at how its peers have exited. Another way of valuing them would be through the cash burn method, where you see how much cash they need to burn over how many months to reach certain milestones.

When you say "yet to start on their monetization plans" do you mean they are not generating revenue? If they are, look at ARR and MRR vs monthly burn rate in order to get a clear view on the runway you're working with before moving on. If they're going bankrupt in two months it won't matter anyway. If they are not yet generating revenue, you have priorities beyond the traditional financial modeling. At that early of a stage, you need to look more to target market, competitors, and sales pipeline/cycle. Other consideration: what round of funding are they at? Are they asking for seed or series b, because the valuation and considerations will be very different between the two. Anyway, since you said they haven't started "monetization" I will proceed as if they are early stage (seed or series a).

So, target market: What is the market this startup is targeting? What is the startup's view of the market vs the real view? Take for instance the regulatory space. Just because banks paid out ~40B in fines this past year (made up) doesn't mean thats what the target market is worth. You need to calculate the market that this startup can realistically reach, which is where they can actually sell to people willing to buy. MS isn't buying from your startup, so whatever they paid in reg fines is irrelevant.

Next, look at competitors. Is their company trying to sell women monthly boxes of sample sized high end cosmetics? Because that market is saturated, and barriers to entry are basically insurmountable. Or, is their company unique with some type of patented IP that can actually solve a customer problem (make sure they know what customer problem they're solving).

Finally, a company cannot survive if no one buys or uses their product. Do they have an articulated sales pipeline? Who are their corporate partners or customers? Are they B2B or B2C? How long is their sales cycle? What is their go to market strategy? Do they understand the cost of scaling, and are they able to absorb the expense?

This would be a basic overview of the diligence necessary to value such a company. In re your Third Point, I'm not quite sure what you're asking. I think you're asking how to pay employees who are not receiving cash, and that is what an options pool is for. The options pool can vary between companies, but is the usual way to compensate early hires besides cash.

As an aside: whatever you do, do not base a valuation on the numbers they gave you in their "future projections" if they cannot back it up 100% with a visible, tangible sales pipeline. Usually, early stage startups will hand over that they "project a growth rate at just 5% to capture just 1% of a target market of 40B and will generate 15M of profit in just 3 years!"

other random issues to consider: who are the founders? have they successfully founded and exited other companies? Who are their other investors? If you can, get in touch with another investor to find out why they invested at the valuation they did.