Estimate your pre-money valuation using four proven methods: revenue multiples, VC method, comparable transactions, and the Berkus scorecard. Free, no signup required.
Your current annual revenue run rate
Base multiple: 8x ARR
Growth rate adjusts multiple up or down
Realistic acquisition or IPO valuation in your market
Percentage of company you are offering
The right method depends on your stage. Pre-revenue startups typically use the Berkus Method or Scorecard Method based on qualitative factors. Early-revenue startups use revenue multiples (ARR or MRR). Later-stage companies are valued using comparable transactions and the VC method. Using multiple methods and triangulating gives the most reliable estimate.
The VC method works backward from an expected exit value. VCs estimate the terminal value at exit (usually 5-7 years out), apply a discount rate for risk (typically 40-70% per year), and calculate what the company must be worth today for them to achieve their target return multiple. A $100M exit in 5 years at 50% annual return target implies a pre-money valuation of roughly $13M.
SaaS ARR multiples vary widely by growth rate. Fast-growing SaaS (>100% YoY) can achieve 10-20x ARR. Mid-growth SaaS (50-100% YoY) typically fetches 5-10x ARR. Slower growth or declining revenue compresses multiples to 2-4x ARR. B2B enterprise SaaS generally commands higher multiples than consumer SaaS.
At pre-seed, there is little financial data to rely on. Investors focus on the founding team (credentials, domain expertise, execution history), market size, and the quality of the initial idea or MVP. Pre-seed valuations typically range from $2M-$10M in the US, with top-tier founders commanding higher values.
The Berkus Method assigns dollar values to five key success factors: sound idea ($500K), prototype ($500K), quality management team ($500K), strategic relationships ($500K), and product rollout or sales ($500K). Adding up the applicable factors gives a maximum pre-money valuation of $2.5M. It is best used for pre-revenue startups.