Tech firms are offering a mix of discounted tech work in exchange for equity as well as some amount of capital investment. How do we evaluate this sort of offer? Clearly, tech development costs money. Will the firm mark up their bid to offer, let's say, $500K worth of development when their actual "cost" is $200K? And how does one consider the cash vs. tech dev "discount"?
in 2 words value of idea's usp and market approach of that idea
Ask them how do they breakdown their services, what salary scale are they considering their developers for example, once you have a vague understanding of the cost structure, then you can cross match that with what you can find those service outside for. That should give you the actual value of their propositions. I don't like these days because I can't control the time of their internal assets, I would not do that deal unless that was the only one on the table.