Startup valuation

1. Startup valuation
Denis Dovgopoliy
denny.do@gmail.com
LI, FB, Twi, Telegram

2. Pre-revenue startup
valuation methods

3. Venture Capital (VC) Method
Post-money valuation = Terminal value ÷ Expected ROI
Pre-money valuation = Post-money valuation — Investment

4. Berkus Method

5. Berkus Method
Sound Idea (basic value)
Prototype (reduces technology risk)
Quality Management Team (reduces execution risk)
Strategic Relationships (reduces market risk)
Product Rollout or Sales (reduces production risk)

6. Scorecard Valuation Method
Strength of the Management Team (0–30%)
Size of the Opportunity (0–25%)
Product/Technology (0–15%)
Competitive Environment (0–10%)
Marketing/Sales Channels/Partnerships (0–10%)
Need for Additional Investment (0–5%)
Other (0–5%)

7. Risk Factor Summation Method

8. Deferred valuation method
CL (CD, CB) or SAFE

9. Startup valuation methods (post
revenue*) on cash-in deals
(ARR/AR > $1M)

10. Comparable Transactions Method
“The Comparable Transactions Method is
really just a rule of three”

11. Comparable Transactions Method (example)

12. Other methods
Discounted Cash Flow method
Book Value Method
Liquidation Value Method
First Chicago Method
Other Bullshit

13. Other factors
Competition (both side)
Delusion
Motivation

14. But:
Preseed - 5-10% or non equity financing (10-50k USD) - Idea
Seed - 5 - 15% or non equity financing (50k-1M USD) - Prototype
Round A - 15-40% (5-15M USD) - Go to market
Round B - 5-20% - Scaling
Round C - up to 10% - Expansion

16. Oooooooops!
Risks are too high! Remember the number:
99.7

17. But return is high!

18. Thank you!
Sincerely yours,
Denis Dovgopoliy,
denny.do@gmail.com