[shampto3]

It's based on the equity the investor is purchasing in the investment. Here's an easy math example:

I invest $10 in a lemonade stand and get 10% equity in the company. That means that I can theoretically buy the company at $100 to get 100% of the equity.

So when investors put $150M into a company, they are purchasing equity/stock/shares/whatever and the company can then be valued based on the percentage of equity they get for their investment.