Company Valuation Calculator

How to Value a Company

Pick the method that matches the company. If it has meaningful revenue, start with the revenue multiple. If an investor is pricing it against a target return, use the VC method. If it is pre-revenue, use the scorecard. Enter the raise once and every method reports the same three outputs: pre-money, post-money, and the dilution the round creates.

Why This Matters

Valuation sets the price of every share issued in the round, and it compounds. Price too low and you hand away ownership you never get back. Price too high and you set a bar the next round has to clear, which is how flat and down rounds happen. Running all three methods on the same company tells you something a single number cannot: how wide the defensible range is, and which assumption is doing the work.

Revenue multiple: what it is for, and when it is wrong

The revenue multiple is a shorthand for a discounted cash flow that nobody wants to build, and it works when revenue is real, recurring, and growing predictably. It is wrong when the revenue is not comparable to the comp set: services revenue dressed as software, gross marketplace volume presented as revenue, or a single customer carrying half the book. It is also wrong at very low revenue, where a 12x multiple on $200,000 of ARR produces a number with no relationship to what anyone would pay. Below roughly $1,000,000 of revenue, investors are buying the team and the trajectory, not the multiple.

VC method: what it is for, and when it is wrong

The VC method works backwards from an exit. The investor picks a plausible exit value and the return they need on a position like this one, divides, and arrives at the most they can pay today. It is the only method that makes the investor's arithmetic visible, which is why founders should run it before a pricing conversation. It is wrong when the exit assumption is wishful, since every dollar of fantasy exit value is divided by the target return and comes straight back as a higher price today. It is also wrong when it ignores future dilution: an investor who needs 10x on a position that will be diluted 40% before exit has to price roughly 40% lower today to get there. Turn the dilution input up and watch the defensible price fall.

Scorecard and Berkus: what they are for, and when they are wrong

For a pre-revenue company there is nothing to multiply, so both methods anchor on comparable deals and adjust. The scorecard method starts from the typical pre-money for comparable pre-revenue companies in the same region and sector, then scores the company above or below that baseline on weighted factors, with the team weighted heaviest. The Berkus method does something similar with a flat ceiling per element, assigning up to a fixed amount for the idea, the prototype, the team, strategic relationships, and early sales. Both are wrong the moment the baseline is wrong, and the baseline is the one input founders are most likely to guess. They are also wrong once real revenue exists, because at that point you are scoring a company whose performance can simply be measured.

Company valuation is not a 409A

A negotiated valuation and a 409A valuation answer different questions and almost always produce different numbers. The valuation on this page is the price of preferred stock in an arm's-length negotiation, and it reflects everything preferred stock carries: liquidation preference, protective provisions, information rights, board seats. A 409A is an independent appraisal of the fair market value of common stock, performed by a third party under IRS rules, so the company can set option strike prices without creating a tax problem for employees. Because common stock lacks all of the preferred protections, the 409A price is usually well below the preferred price, and a common-to-preferred ratio well under 1.0 is routine after a priced round. A 409A is not a second opinion on your fundraising valuation, and you cannot substitute one for the other.

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What to Do With Your Results

1. 1Run all three methods and treat the spread as your range, not any single number as the answer.
2. 2Test which input moves the answer most, and be ready to defend that one assumption in the room.
3. 3Model the dilution the round creates on your cap table before you agree to a price.
4. 4Commission a 409A after the round closes, before you grant options at the new price.