Startup Valuation Calculator
Estimate your startup's valuation using three industry-standard methods: Revenue Multiple, Earnings Multiple, and Discounted Cash Flow (DCF). Switch between methods to compare results.
ARR or trailing 12-month revenue
SaaS: 5-15x · E-commerce: 1-3x · Marketplace: 3-8x
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How to Value a Startup
Startup valuation is a critical exercise for fundraising, M&A discussions, equity planning, and strategic decision-making. Unlike public companies with market-determined prices, startup valuations are negotiated based on a mix of quantitative analysis and qualitative judgment.
Revenue Multiple Method
The simplest and most common method for growth-stage startups. Multiply your annual recurring revenue (ARR) by an industry-appropriate multiple. SaaS companies with strong growth and retention typically command 10-20x revenue multiples, while traditional businesses may see 1-5x.
Earnings Multiple Method
More appropriate for profitable companies. Multiply your EBITDA or net earnings by an industry multiple. This method is preferred by investors focused on profitability over growth, and is the standard for established businesses and later-stage companies.
DCF Method
The most rigorous method, but also the most sensitive to assumptions. Project future cash flows, apply a discount rate reflecting risk, and calculate a terminal value. DCF is most useful for companies with predictable cash flows and a clear path to profitability. For early-stage startups, the uncertainty in projections makes DCF less reliable.
Frequently Asked Questions
- How do you value a startup?
- Startups are typically valued using one of several methods: Revenue Multiple (valuation = annual revenue x industry multiple), Earnings Multiple (valuation = EBITDA x industry multiple), Discounted Cash Flow (present value of projected future cash flows), or Comparable Transactions (based on what similar companies sold for). Early-stage startups with no revenue often use Scorecard or Berkus methods instead.
- What is a revenue multiple?
- A revenue multiple is a valuation ratio that expresses a company's value as a multiple of its annual revenue. For example, a SaaS company with $2M ARR and a 10x revenue multiple would be valued at $20M. Multiples vary widely by industry: SaaS (5-15x), e-commerce (1-3x), marketplaces (3-8x), fintech (5-20x).
- What is DCF valuation?
- Discounted Cash Flow (DCF) values a company based on the present value of its expected future cash flows. You project cash flows for 5-10 years, calculate a terminal value for all cash flows beyond that period, then discount everything back to today using a discount rate that reflects the risk. Higher risk = higher discount rate = lower present value.
- What discount rate should I use for a startup?
- Discount rates for startups are typically much higher than for established companies due to higher risk. Seed-stage startups: 30-50%, Series A: 25-35%, Series B+: 15-25%, Growth-stage: 12-20%, Mature companies: 8-12%. The rate should reflect the probability-weighted risk of the company failing to deliver projected cash flows.
- How accurate are startup valuations?
- Startup valuations are more art than science, especially at early stages. They represent a negotiated outcome between founders and investors, informed by market comparables, growth metrics, team quality, and competitive dynamics. Valuations can vary 2-5x depending on the method used and assumptions made. Use multiple methods and present a range rather than a single number.