Valuation is based on what percent of shares an investor buys for how much. eg; if I buy 5% (0.05) of a company for 100$. The company valuation would be 100 / 0.05 = 2000$.
It can be a little more complicated with post and pre buy valuation, but that is the general idea.
It can be a little more complicated with post and pre buy valuation, but that is the general idea.