Worthworm's analytical and strategy tools take the guesswork out of pre-money valuations and startup company analysis. We help entrepreneurs determine a sound, credible PMV that they can feel confident sharing, and assist angel investors with analyzing a venture's risks and opportunities to complete their due diligence. This tutorial shows private beta testers how to use Worthworm's questionnaire, interactive tools, and insightful reports.

1. Calculating Your
Pre-Money Valuation

2. HELLO
Worthworm takes the
guesswork out of pre-
money valuations (PMV)
with sophisticated
strategic analysis tools
that are designed to
provide a stronger, more
credible starting point for
investment negotiations
between entrepreneurs
and angel investors.
INTRODUCING WORTHWORM

3. STEP 1
To create your first
venture, click the tab that
says, “Step 1 | Create New
Venture.” You can have
multiple ventures, but we
recommend starting with
one.
CREATE A NEW VENTURE

4. STEP 2
Once you’ve created your
venture, you can create
models to test how
different business factors
and decisions could affect
your PMV.
To create a model, click
the tab that says, “Step 2 |
Start New Model.” Type
the name of your model
into the open box, and
click “Save.” (Don’t worry,
you can always change
the model name later.)
START A NEW MODEL

5. STEP 3
Your PMV calculation
starts with a guided
questionnaire that
includes more than 70
questions focusing on
key valuation drivers of
your business.
Your answers power
Worthworm’s
sophisticated algorithms,
which provide a sound,
defensible PMV and help
you think through vital
questions that contribute
to your venture’s success.
COMPLETE QUESTIONNAIRE

6. STEP 3
Here’s how to complete
the questionnaire:
1. Go through the
questions about 9 aspects
of your business,
selecting the answer to
your question on the left
and your confidence in
that answer on the right
(if requested). You can
start and stop at any time
if you don’t know the
answer to a question or
want to come back to it
later.
COMPLETE QUESTIONNAIRE

7. STEP 3
2. When you’re done with
a section of questions,
click “Continue” at the
bottom of the page to
move on to the next
section.
3. Once all of the sections
have been completed,
click “Calculate” to
calculate your estimated
PMV.
COMPLETE QUESTIONNAIRE

8. STEP 4
Your answers go through
an algorithm that uses
almost 1,100 analytic
parameters and over 4,000
outputs, blends the most
respected valuation
methods, and compares
your ventures with third
party research about
companies at the same
maturity level.
The result is a credible
estimated PMV that any
investor or entrepreneur
can feel confident sharing
and defending.
CALCULATE MY PMV

9. STEP 4
Click “Step 2 | My PMV” to
see your PMV displayed
on a valuation bar with an
arrow.
The arrow indicates
your current estimated
PMV, and the valuation
bar illustrates how much
higher or lower it could
be based on operational
and other risks, including
the levels of confidence
you expressed while
answering the
questionnaire.
UNDERSTANDING YOUR PMV

10. Maximizing Your
Pre-Money Valuation

11. OVERVIEW
• Before you can form a plan to increase
your pre-money valuation (PMV), it’s
critical to consider all the factors that
drive your valuation, as well as which
steps you’re most willing and able to take
in order to increase it.
• Think about this question: Are you more
likely to invest time, capital, or both to
strengthen your business?
✓ If your answer is “time,” use the Risks
Tool to see how dedicating time to
reducing uncertainty could improve
your PMV.
✓ If your answer is “money” or “both,”
use the Risks and Opportunities Tool
to see how investing time in reducing
uncertainty and money in pursuing
opportunities could boost your PMV.
• Finally, Worthworm’s Next Steps Tool and
Self-Directed Next Steps Tool help you
develop a strategy with various
combinations of steps you could take to
minimize uncertainty, maximize
opportunity, and increase your PMV.
MAXIMIZING YOUR PMV

12. ANALYTIC TOOLS
The first analytic tool you
can use is the Risks Tool,
which shows the areas of
your venture that
present the most
uncertainty.
To access this tool, click
the downward arrow next
to “Step 3 | Maximize My
PMV,” and select
“Analysis | Risks.”
RISKS TOOL: WHAT IS IT?

13. ANALYTIC TOOLS
1. This tornado diagram identifies
the areas where investing time
could reduce uncertainty and
increase your PMV. The long
bars need more attention, and
short bars need less.
2. To boost your PMV, focus your
efforts on decreasing
uncertainty in the areas with the
longest bars.
3. Click each bar to view the
questions used to determine the
bar’s length and a pie chart
showing the weight of each
question for that valuation
driver. Next, click “View/Edit
Answer” to change your answers,
then “Save Edit(s)”, and finally
“Calculate” in the upper right
corner to see how those changes
affect your PMV.
RISKS TOOL: HOW DO I USE IT?

14. ANALYTIC TOOLS
The Risks and
Opportunities Tool
combines the risk
analysis from the
previous tool with an
overview of the areas
that present the most
opportunity for your
venture.
To access this tool, click
the downward arrow next
to “Step 3 | Maximize My
PMV,” and select
“Analysis | Risks and
Opportunities.”
RISKS & OPPORTUNITIES TOOL:
WHAT IS IT?

15. ANALYTIC TOOLS
1. This tornado diagram identifies the
aligned areas where investing time
in minimizing uncertainty and
money in maximizing
opportunities could increase your
PMV. The long bars need more
attention, and short bars need less.
2. To boost your PMV, focus your
efforts on decreasing uncertainty
and taking advantage of
opportunities in the areas with the
longest bars.
3. Click each bar to view the questions
used to determine the bar’s length
and a pie chart showing the weight
of each question for that valuation
driver. Next, click “View/Edit
Answer” to change your answers,
then “Save Edit(s)”, and finally
“Calculate” in the upper right corner
to see how those changes affect
your PMV.
RISKS & OPPORTUNITIES TOOL:
HOW DO I USE IT?

16. STRATEGY TOOLS
Once you’ve analyzed
ways to minimize risk
and pursue opportunities,
the Next Steps Tool helps
you develop a strategy
with various ways you
could invest resources to
increase your PMV.
To access this tool, click
the downward arrow next
to “Step 3 | Maximize My
PMV,” and select
“Strategy | Next Steps.”
NEXT STEPS TOOL: WHAT IS IT?

17. STRATEGY TOOLS
1. This is a powerful
visualization tool that
focuses your resources and
prioritizes your efforts on the
factors that you’re most
willing and able to address.
2. First, think about whether
you want to invest time,
money, or both to maximize
your valuation.
3. Then, choose the Risk View
tab if your answer is “time,”
Value View tab if your answer
is “money,” or Next Steps tab
if your answer is “both.” In
each of those tabs, click on
the dots (which represent
combinations of key
valuation drivers you could
focus on), and see how acting
on those items could change
your PMV.
NEXT STEPS TOOL: HOW DO I USE IT?

18. STRATEGY TOOLSNEXT STEPS TOOL: HOW DO I USE IT?
4. When you find a dot that
represents something you’d
like to focus on, click
“Designate as a Priority Step”
to bookmark it as an action
item for your team. You can
also use the table to sort and
view the same information.
5. If you want to edit your
answers in the questionnaire
and see how those changes
affect your PMV, go to the
Questionnaire, adjust your
answers, click “Calculate,” and
return to the Next Steps Tool to
see how the dots and
recommendations change.

19. STRATEGY TOOLS
If you would rather
manually choose the
next steps to take, use
the Self-Directed Next
Steps Tool by clicking the
downward arrow next to
“Step 3 | Maximize My
PMV” and selecting
“Strategy | Self-Directed
Next Steps.”
This tool allows you to
choose up to two actions
at a time, prioritize their
order, and see how taking
those steps could affect
your PMV.
SELF-DIRECTED NEXT STEPS
TOOL: WHAT IS IT?

20. STRATEGY TOOLS
1. Select one item from the
drop-down menus under
“First Step” and one item
from the drop-down menus
under “Second Step.”
2. A decision tree will appear
that shows the range of
possible valuation
outcomes depending on
which items you act on.
SELF-DIRECTED NEXT STEPS
TOOL: HOW DO I USE IT?

21. Viewing and Downloading
Worthworm Reports

22. OVERVIEWBASIC AND FUNDING REPORTS
In addition to helping
you calculate and
maximize your pre-
money valuation (PMV),
Worthworm offers a
number of reports that
you can view, download,
and share.
To download any or all of
these reports, click the tab
that says, “Step 4 |
Download Reports.”
Then, select the report(s)
you would like to
download.

23. REPORTS
The PMV Report is an
overview of your current
estimated PMV, a
snapshot of where the
venture lies with respect
to several key valuation
drivers, all questions
from Worthworm’s
questionnaire, and your
answers to them. It offers
a comprehensive
understanding of the
inputs underlying your
venture’s given model
and its corresponding
PMV calculation.
PMV REPORT
BRONZE
SUBSCRIPTION

24. REPORTS
The Snapshot Report
consists of six charts that
illustrate where your
venture currently stands
with respect to certain
investment criteria.
SNAPSHOT REPORT
BRONZE
SUBSCRIPTION

25. REPORTS
The Inputs Comparison
Report shows which
answers differ between
any two models of your
venture and the estimated
PMV for each one.
INPUTS COMPARISON REPORT
BRONZE
SUBSCRIPTION

26. REPORTS
The Capitalization (Cap)
Table details both the
past round(s) and
current round of
funding for your venture
and also reflects the
number and details of
future rounds before
experiencing an exit
event.
CAPITALIZATION TABLE
SILVER & GOLD
SUBSCRIPTION

27. REPORTS
The Equity Dilution
Report illustrates the
estimated dilution in
ownership each funding
round’s investors would
experience in future
rounds of financing for
your venture.
EQUITY DILUTION REPORT
SILVER & GOLD
SUBSCRIPTION

28. REPORTS
The Return on
Investment (ROI) Report
illustrates the estimated
gross cash-on-cash
return each funding
round’s investors would
receive from a projected
exit event.
ROI REPORT
SILVER & GOLD
SUBSCRIPTION

29. GET STARTED
Ready to calculate your venture’s PMV
and learn the best ways to maximize it?
Start using Worthworm, and get in touch with us
if you have questions or feedback.
info@worthworm.com
888-429-2530
TRY WORTHWORM TODAY