How to value a startup before revenue
Valuing an early-stage startup is one of the hardest parts of fundraising. Without years of revenue data, founders and investors rely on comparative methods, milestone-based approaches, and expected return calculations. This calculator implements three of the most widely used early-stage valuation methods.
The Scorecard method
Developed by Bill Payne, the Scorecard method compares your startup against typical seed-stage companies. You rate yourself across seven weighted factors (team, market, product, competition, marketing, investment needs, and other). The weighted score is multiplied by a typical seed valuation in your region to produce an estimate.
The Venture Capital method
The VC method works backwards from the investor's perspective. If an investor expects your company to exit at a certain value and needs a specific return on their investment, the maximum they would pay today is the exit value divided by their target multiple. Typical VC target multiples range from 10x to 30x depending on stage and risk.
The Berkus method
Created by angel investor Dave Berkus, this method assigns value to five key risk-reducing milestones, each worth up to 500K. The idea is that a pre-revenue startup's value comes from reducing risk: having a sound idea, a working prototype, a quality team, strategic relationships, and early sales or rollout progress. The maximum pre-revenue valuation under this method is 2.5M.
Tips for valuation conversations
- Use multiple methods and present a range. No single method gives the definitive answer.
- Research comparable deals in your market and stage. Actual transaction data beats theoretical models.
- Your valuation is only real when someone writes a check. Focus on finding the right investor, not the highest number.
- Consider the full deal structure. Valuation is important, but terms like liquidation preferences and anti-dilution matter just as much.