𝐕𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐚 𝐒𝐭𝐚𝐫𝐭𝐮𝐩

𝐕𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐚 𝐒𝐭𝐚𝐫𝐭𝐮𝐩

If you’re building a pre-revenue startup, chances are you’re not sure how much your company is worth—and neither are investors.

This guide breaks down the most widely used frameworks for early-stage valuation and when to use each.

Key Takeaways:

1️⃣ Berkus Method – Assigns a fixed value to things like idea quality, prototype, and early team. Great for idea-stage companies.

2️⃣ Scorecard Method – Compares you against local peers, adjusting valuation based on strength of team, market, product, etc.

3️⃣ Risk Factor Summation – Adds or subtracts value based on 12 startup risk areas like team, competition, tech, and market.

4️⃣ VC Method – Calculates backwards from expected exit value using investor ROI expectations. Common in seed/Series A rounds.

5️⃣ Cost-to-Duplicate – Looks at what it would cost to rebuild your startup from scratch. Often yields a lower-bound estimate.

6️⃣ Comparable Method – Benchmarks your metrics (like users or revenue) against recent similar startup deals.

7️⃣ First Chicago Method – Models worst, normal, and best-case outcomes to triangulate a valuation range.

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