Startup Company Valuation Calculator
Calculate early-stage startup valuations using specialized methods for pre-revenue companies.
How the Startup Company Valuation Calculator works
Value startups using the Berkus Method, Scorecard Method, and other techniques that evaluate team, market, and progress.
Traditional financial metrics don’t work for startups with no revenue, so investors use specialized methods to determine fair value.
How it works
Tutorial
Early-stage startup valuation is challenging because there’s often no revenue or profit to analyze. Instead, investors use specialized methods like the Berkus Method, which assigns value to five key factors: idea quality, prototype, team, relationships, and early sales. This provides a systematic way to value companies that traditional methods can’t handle.
Use the calculator above to value early-stage startups with multiple methods, or follow the steps below to apply the Berkus Method yourself.
The Formula
| Method | Approach |
|---|---|
| Berkus Method | Assign value (up to $500K) to 5 key factors |
| Scorecard Method | Compare to regional average, adjust by factors |
| Risk Factor Summation | Start with base value, adjust for 12 risk factors |
| VC Method | Terminal Value ÷ Expected Return × Retention |
Step-by-Step Calculation
Let’s value a seed-stage startup using the Berkus Method.
Step 1: Evaluate Sound Idea
Assess the business model value:
| Factor | Max Value | Assessment | Assigned Value |
|---|---|---|---|
| Sound Idea | $500,000 | Strong model, proven in similar markets | $350,000 |
Reasoning:The business model is proven in similar markets but needs adaptation.
Step 2: Evaluate Prototype
Assess product development:
| Factor | Max Value | Assessment | Assigned Value |
|---|---|---|---|
| Prototype | $500,000 | Working product with 50 active users | $300,000 |
Reasoning:Product exists and is being used, but needs significant development.
Step 3: Evaluate Management Team
Assess the founding team’s ability:
| Factor | Max Value | Assessment | Assigned Value |
|---|---|---|---|
| Management Team | $500,000 | Two founders, one previous exit, strong skills | $425,000 |
Reasoning:Strong technical team with relevant experience and previous success.
Step 4: Evaluate Strategic Relationships
Assess partnerships and market access:
| Factor | Max Value | Assessment | Assigned Value |
|---|---|---|---|
| Strategic Relationships | $500,000 | Letter of intent from major customer, 3 advisors | $275,000 |
Reasoning:Good foundation with letter of intent, but not yet generating revenue.
Step 5: Evaluate Product Sales
Assess early traction:
| Factor | Max Value | Assessment | Assigned Value |
|---|---|---|---|
| Product Rollout | $500,000 | $15K monthly revenue, 40% monthly growth | $250,000 |
Reasoning:Revenue exists and is growing quickly, but still very early stage.
Step 6: Calculate Total Valuation
Add the values assigned to each factor:
| Factor | Value |
|---|---|
| Sound Idea | $350,000 |
| Prototype | $300,000 |
| Management Team | $425,000 |
| Strategic Relationships | $275,000 |
| Product Rollout | $250,000 |
| Total Pre-Money Valuation | $1,600,000 |
Calculation:$350,000 + $300,000 + $425,000 + $275,000 + $250,000 =$1,600,000
Step 7: Determine Investment Terms
If raising $400,000, calculate dilution:
| Component | Calculation | Value |
|---|---|---|
| Pre-Money Valuation | $1,600,000 | |
| Investment Amount | $400,000 | |
| Post-Money Valuation | $1,600,000 + $400,000 | $2,000,000 |
| Investor Equity | $400,000 ÷ $2,000,000 | 20% |
Calculation:$1,600,000 + $400,000 = $2,000,000; $400,000 ÷ $2,000,000 =20%
Final Answer:The startup’s pre-money valuation is$1.6 million, resulting in20% dilutionfor a$400,000investment
What This Means
A $1.6M valuation for a seed-stage startup with $15K monthly revenue ($180K annual) represents approximately 9x revenue, which is reasonable given the strong team, early traction, and 40% monthly growth rate.
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