There are many ways to value a company; much of it is based on what the buyer’s (investor’s) objectives, insights, and needs are. I once found out that the purchase of a $500M company by a large corporation I consulted to, I would not have valued at more than 1/5th of the price, considering the position of the startup company in the marketplace. But the corporate buyer just had to have it because it filled a hole in their product strategy they didn’t see coming, and competition drove up the price.
Which brings me to what part of your company is a service vis-a-vis a product. Product companies are generally valued higher because the investment made in product development will or must pay off a multiple without a per-deal increase in development cost, the economies of scale of a product company. A reason why many venture capitalists will not invest in consulting service companies, as such a service generally requires a sizable incremental “production” cost applied to each service deal. Quite the opposite to a pure product company, where an investment in production (albeit initially perhaps higher) will yield a somewhat predictable multiple in returns without a significant increase in production cost per deal.
So, in your case, I cannot assess based on your description that a $600K deal may have either have cost you 600K to produce, or 1K. Or whatever the margins you yield from these deals. Or whether the investment made in the deployment of one service can be productized to yield implementation at other sites at significant margins.
The valuation of the company is based not on what your turnover is, but how much margin you can accumulate to increase the value of the company, and the addressable market you uniquely tap into to suggests you will be the king of your domain and therefore deserve a multiplier of your value as investment valuation. Viable investment strategies are based on the recognition, timing, and incremental value of the inflection points along the believable upside trajectory of the company in question.
But in the end, the value of a stamp is what the stamp collector and the seller agree on, not what the paper is worth the stamp has been printed on if you catch my drift. An assessment not always correlated to sound reasoning. And the more you run an outlier business, the less reliable comps you will find to make the marriage of buyer and seller happen. For outliers have no precedent. Much of the valuation process is not science, but sheer poker play. A game that reveals who blinks first and needs the other more. Your valuation will reflect the balance of that desire.
I would personally never sell 70% of my company, along with the control of 70% of the voting rights of my company, especially not at this early stage of the game. Investor-run companies tend to fail miserably in the long run, and 30% of nothing equals nothing. See if you can negotiate voting rights disproportionate to ownership rights, but only when you believe the company can’t succeed or improve its valuation without the investor (err loan-shark) on board. My hunch is, this deal is not a deal worth engaging in, but if you must, there are ways to put investors in their place and align your agenda with theirs.