Startup Valuation Calculator
Estimate what your startup might be worth using a revenue multiple or, for pre-revenue companies, a Berkus-style scorecard — free, instant, no signup.
Range across the saas / subscription software preset: $2.5M – $5.0M (based on $500K ARR)
Two ways to value a startup
How to value a startup depends almost entirely on one question: does it have revenue yet? Once a company has recurring revenue, the fastest and most common method is a revenue multiple — take annual revenue and multiply it by a factor that reflects how the market prices similar businesses. SaaS commands a higher multiple than services because recurring, high-margin revenue is worth more per dollar than one-off billable hours.
Before revenue exists, multiples have nothing to multiply. That’s where pre-revenue valuation methods like the Berkus scorecard come in — instead of revenue, they price the things that reduce risk: a validated idea, a working prototype, a team that can execute, relationships that open doors, and any early signal of demand. Investors sum a dollar value for each factor to arrive at a pre-money number they can defend without a single line of revenue on the table.
What actually drives early-stage valuation
The formula is only the starting point — a few things move the real number far more than the multiple itself:
- Growth rate. A SaaS company growing 15% month-over-month earns a materially higher multiple than one growing 15% a year, even at identical ARR.
- Retention and churn. Revenue that sticks around is worth more than revenue that has to be re-earned every month — high churn quietly drags a multiple toward the low end of its range.
- Gross margin. Two companies with the same revenue can be valued very differently if one keeps 80% of every dollar and the other keeps 30%.
- Team and founder track record. A team that’s built and sold before de-risks execution in a way no financial metric captures — this is the single heaviest-weighted factor in scorecard methods.
- Market size and timing. The same product pitched into a shrinking niche versus a market everyone believes is about to expand gets priced very differently by the same investor.
- Competitive tension in the round. A raise with three term sheets on the table closes at a higher valuation than an identical company with one interested investor.
When these numbers mislead you
A calculator output is only as good as the assumptions behind it — a few ways this can go wrong:
- Applying public-market multiples to a private company. Public SaaS multiples move with the stock market and liquidity that a private, illiquid startup doesn’t have — borrowing today’s public comp directly overstates a private valuation.
- Treating the Berkus caps as fixed truth. The $500K-per-factor, $2.5M-total ceiling was a rule of thumb set decades ago — it’s a reasonable anchor, not a law of valuation, and many current pre-revenue rounds close above or below it.
- Ignoring revenue quality. $1M in ARR from month-to-month contracts with 8% monthly churn is not the same company as $1M in ARR locked into annual contracts with 2% churn — the multiple should move accordingly, not stay fixed.
- Confusing valuation with cap table math. A valuation number doesn’t tell you dilution, liquidation preferences, option pool sizing, or what percentage of the company you actually keep after a round — that requires a real cap table model.
- Skipping demand validation entirely. A valuation formula assumes the revenue (or the traction behind a scorecard score) is real and durable — it says nothing about whether the underlying demand holds up under scrutiny.
Frequently asked questions
How does this startup valuation calculator work?
It offers two methods, because "how to value a startup" depends entirely on whether it has revenue yet. If you have ARR or MRR, the revenue multiple method applies an industry-standard multiple to your revenue. If you're pre-revenue, the scorecard method (based on the Berkus method) scores five qualitative factors — idea, prototype, team, relationships, and traction — and sums them into an estimated valuation.
How do you value a pre-revenue startup?
Pre-revenue valuation can't use a revenue multiple because there's no revenue to multiply. Instead, investors use qualitative scorecard methods like Berkus or the Scorecard Valuation Method, which assign a dollar value to how de-risked each part of the business is — the strength of the idea, whether a working prototype exists, the team's ability to execute, strategic relationships already in place, and any early traction like a waitlist or pilot customers. This calculator's scorecard tab implements a simplified version of that approach.
What is the Berkus method?
The Berkus method, created by investor Dave Berkus, values a pre-revenue startup by assigning up to $500K to each of five risk-reduction factors (sound idea, prototype, quality team, strategic relationships, and product rollout/traction), for a maximum pre-money valuation of $2.5M. It was designed decades ago as a rule of thumb — useful for a rough first number, not a precise formula.
What is a good revenue multiple for a startup?
It varies a lot by business model. SaaS and subscription software typically trade at 5–10× ARR because recurring revenue is predictable and high-margin. E-commerce and DTC brands usually see 1–3× revenue due to thinner margins and inventory risk. Services and agency businesses are often 1–2× since revenue is tied to people's time, not scalable product. Marketplaces land around 3–6×, reflecting network effects but also take-rate risk. Growth rate, margins, and churn all push a company toward the low or high end of its range.
What's the difference between pre-money and post-money valuation?
Pre-money valuation is what the company is worth before a new investment comes in. Post-money valuation is pre-money plus the new cash raised. If a startup is valued at $4M pre-money and raises $1M, it's worth $5M post-money, and the new investor owns 20% ($1M ÷ $5M). Both the revenue multiple and scorecard estimates from this calculator are pre-money figures.
Why do valuations vary so much between investors?
Because valuation is a negotiation, not a calculation. Two investors looking at the same startup can land on very different numbers depending on how much they want in, what else is in their portfolio, how competitive the fundraising round is, and where public-market comparables sit that quarter. A calculator gives you a defensible starting anchor — the actual number gets set at the term sheet.
Is this valuation calculator a substitute for a real valuation?
No. This tool exists to give founders a fast, educational starting estimate before a fundraising conversation, not a substitute for a 409A valuation, a lawyer, or an experienced investor. Formal valuations account for cap table structure, liquidation preferences, dilution, and legal terms this calculator doesn't touch.
Related free tools
- Break-Even Calculator — know how many sales you need before you start pricing a raise around revenue.
- ROI Calculator — check the return an investor would get at the valuation you’re proposing.
- TAM SAM SOM Calculator — size the market a valuation multiple is implicitly betting on.
- Competitor Finder — see who else is competing for the multiple you’re assuming.
- Startup Idea Generator — no idea to value yet? Generate one first.
NEXT STEP
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