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Startup Valuation Calculator
Get a defensible starting estimate of what your startup is worth. Value it from a revenue multiple, or switch methods to work out the pre-money, post-money, and investor dilution for a specific funding round — before you walk into the negotiation.
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→ Estimated valuation
A range, not a price
At $500,000 of revenue and a 6× multiple, expect roughly $2.25M–$3.75M. Early-stage valuations are negotiated — traction, team, and market move this more than the formula.
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A rough estimate for planning, not a formal valuation, appraisal, or investment advice. Real valuations are negotiated and depend on traction, team, market, and terms.
How startup valuation is calculated
There is no formula that prices a startup — valuation is negotiated, not computed. But a handful of transparent methods anchor almost every conversation, and this calculator runs four, so you can triangulate rather than rely on a single number.
- Revenue multiple: valuation = annual revenue (or ARR) × a market multiple
- Scorecard (Payne): a baseline pre-money adjusted by how you compare to peers on team, market, product, and traction
- VC method: works back from an exit — terminal value ÷ the investor's target return
- Pre / post-money: post-money = pre-money + investment; ownership = investment ÷ post-money
A worked example
A SaaS startup with $500,000 of ARR and a 6× multiple lands around a $3M base valuation. Separately, if it raises $1M on a $4M pre-money, the post-money is $5M and the investor owns 20%. The two methods triangulate: the multiple suggests a range, and the round terms turn that range into ownership.
What drives a startup's valuation?
Early-stage valuation is driven far more by story than by spreadsheets. The biggest levers are the team's track record, the size and growth of the market, evidence of traction (revenue, users, retention), the strength of the product and any defensibility, and the competitive dynamics of the round itself — more interested investors means a higher price. Revenue multiples and DCFs put numbers around the conversation, but a hot round with two term sheets beats any formula.
How much dilution is normal?
Founders typically give up 10–25% in a priced round; parting with much more than 25% in a single round is a signal to renegotiate the raise size or the pre-money. Across a seed and a Series A, expect cumulative dilution of 30–45% before option pools. The pre/post-money method above shows exactly what each round costs you — model it before you agree to a number, because dilution compounds across rounds.
How founders misprice a round
- Anchoring on one method. Triangulate — a multiple, the VC method, and comparable rounds should roughly agree.
- Over-optimizing valuation. Too high a price now sets a bar you must clear next round or face a down round.
- Ignoring the option pool. A pool created pre-money dilutes founders, not investors — know who bears it.
- Confusing pre- and post-money. A “$5M valuation” means very different ownership depending on which one it is.
Valuation and ownership are inseparable, so it pays to learn how to value a startup properly and to model the effect of each round on a cap table before you sign anything.
→ Beyond the calculator
Justify your valuation in front of investors
A number is only as strong as the story behind it. We build the pitch deck and the financial model that justify your ask — traction, market, and projections that make your valuation credible instead of aspirational.
Frequently asked questions
- There's no single formula — early-stage valuations are negotiated. A common quick estimate is a revenue multiple: valuation = annual revenue (or ARR) × a market multiple for your sector and growth rate. For a funding round, the other key math is post-money valuation = pre-money valuation + new investment. This calculator does both.
- Pre-money valuation is what the company is worth before new investment goes in. Post-money valuation is pre-money plus the new money raised. If your pre-money is $4M and you raise $1M, your post-money is $5M, and the investor owns $1M ÷ $5M = 20% of the company.
- It depends heavily on sector and growth. SaaS businesses often trade on 5–10× ARR (higher when growth is fast), while services and many traditional businesses are closer to 1–3× revenue. Use a multiple drawn from recent comparable deals in your space, and stay conservative — an inflated multiple is easy for investors to discount.
- The Scorecard (or Payne) method values an early-stage startup by taking a baseline pre-money valuation for comparable companies at your stage and region, then adjusting it up or down based on how you compare on the factors investors weigh most: team (typically ~30%), market size (~25%), product (~15%), competition, sales channels, and traction. The calculator multiplies the baseline by your weighted score, so a stronger-than-average team and market push the valuation above the baseline.
- The venture-capital method works backward from a future exit. You estimate revenue in the exit year and apply an exit multiple to get a terminal value, then divide by the return an investor wants (e.g. 20×) to get today's post-money valuation; subtracting the new investment gives the pre-money. It's the lens most investors actually use, because it ties today's price to the return they need.
- When you issue new shares to investors, existing owners' percentages shrink. After a round, founders own roughly pre-money ÷ post-money of the company, minus any new option pool created as part of the deal. Raising $1M at a $4M pre-money hands investors about 20%, leaving founders and earlier holders to split the remaining 80%.
- It gives a transparent, defensible estimate — not an appraisal. Real valuations come from negotiation and depend on traction, team, market, comparable deals, and deal terms. Use the figure to prepare for a conversation, not to set a price in stone. It is an estimate for planning, not investment advice.