Guide
Startup valuation,method by method, with a live example.
How investors value a company that may not have revenue yet: pre-money and post-money, the five pre-revenue methods, what the spread between them means, and a seed-stage example run through every method by the same engine that runs the Replafin workspace.
Definitions
Pre-money, post-money and what the round buys
A valuation is a price, not a fact: what a founder and an investor agree the company is worth on the day money changes hands. Pre-money is that value before the new cash; post-money is pre-money plus the round. The investor's share is the round divided by post-money.
The methods
Five ways to value a company before it has revenue
Angels and seed funds reach for these because there is no cash flow to discount yet. Each answers a different question, which is why they disagree.
- Berkus. A fixed amount, conventionally up to $500k, for each of five risks the company has already retired: a sound idea, a working prototype, a quality team, strategic relationships, and early rollout or sales. It caps out around $2.5M by design, so it speaks to the earliest rounds.
- Scorecard. Start from the average pre-money of comparable deals at this stage and region, then adjust for how the company compares on seven weighted factors. Team weighs most, then the size of the opportunity.
- Risk Factor Summation. The same anchor, plus or minus a fixed step (conventionally $250k) for each of twelve risks rated from much riskier to much safer than average.
- Venture capital method. Work backwards from the exit. A plausible exit value, times the share the investor still holds after later rounds, divided by the return they need, is what they can pay today; less the round, that is the pre-money.
- Stage benchmark. The band most rounds at the stage close in, scaled by the sector. Not evidence about this company, but the sanity check the others are read against.
Once there is revenue, two more join: forward multiples (enterprise value as a multiple of the next twelve months' revenue or EBITDA) and a discounted cash flow of the projected statements. Replafin runs all of them from one model. The three-statement guide shows the statements those two read from.
Worked example
Northwind Analytics, seed stage, raising $1.5M
The same company as the other guides: a B2B SaaS business with $529k of revenue in its first forecast year, growing to $9.2M by FY2029, pricing a $1.5M seed round. The projection engine extends the twelve-month model into the years the methods need; every figure below is computed, not typed.
- Low
- $1.41M
- lowest applicable method
- Median
- $17.5M
- across applicable methods
- High
- $19M
- highest applicable method
- Seed band
- $10M to $25M
- stage benchmark, B2B SaaS
| Method | Low | Base | High |
|---|---|---|---|
| Berkus method | $1.52M | $1.9M | $2.28M |
| Scorecard method | $16.1M | $19M | $21.8M |
| Risk Factor Summation | $15.3M | $18M | $20.7M |
| Venture capital method | $686k | $1.41M | $2.14M |
| Stage benchmark | $10M | $17.5M | $25M |
Berkus method. Dave Berkus assigns up to $500k for each of five risks a startup retires: a sound idea, a prototype, a quality team, strategic relationships and early rollout or sales. Your factors add to $1.9M, driven mostly by sound idea, prototype, quality management team, product rollout or sales. Shown as a ±20% band because the per-factor amounts are judgement, not measurement.
Scorecard method. Bill Payne's Scorecard starts from the average pre-money of comparable deals ($17.5M) and adjusts it by how this company compares on seven weighted factors; team counts most. Your weighted comparison comes to 1.08× the average, giving $19M. Shown as a ±15% band.
Risk Factor Summation. Starts from the average pre-money of comparable deals ($17.5M) and adds or subtracts $250k for each step of twelve risks rated from −2 (much riskier than average) to +2 (much safer). Your ratings net to +2 steps (+$500k), giving $18M. Shown as a ±15% band.
Venture capital method. Works backwards from the exit. Revenue of $17.7M in year 7 at 6× gives an exit value of $106M. An investor entering now expects to keep 55% of their stake through later rounds and needs a 20× return, so they can pay a post-money of $2.91M today; less the $1.5M round, the pre-money is $1.41M. The band comes from ±25% on the exit value. The projection covers 6 years but the exit is in year 7; year 6's revenue was grown at 3% a year (the implied rate, capped at 50%) to reach it.
Stage benchmark. The pre-money most Seed rounds close at, roughly $10M–$25M. A rough US convention to sanity-check the other methods against, not a fact about any particular deal.
Reading the spread
Why the methods disagree, and what to do with that
The example's methods land anywhere from $1.41M to $19M. That is not a bug in the arithmetic; it is what the methods measure. Berkus and the VC method price what has been proven and what a specific investor can pay for a specific exit, so they stay in the low millions for a company with a few hundred thousand in revenue. The Scorecard, Risk Factor and stage benchmark describe what seed rounds in this sector actually close at, which in 2026 is far above what the company's own numbers justify on their own. The gap is the premium the market pays for the team and the story.
- Anchor on the band, argue with the methods. The stage benchmark sets the conversation; Berkus and the VC method are where an investor will push back.
- Size the round first. How much you need to reach the next milestone, plus a buffer, decides the raise; the valuation then decides the dilution. Doing it the other way round is how founders end up with a round that does not last.
- Test your own number. Put the planned pre-money or SAFE cap next to the range. Above the high end, expect to justify it with traction; below the low end, you are probably leaving ownership on the table.
In the workspace
Valuation, cap table and the raise, from one model
Replafin runs every method above from the company's own model: the stage and sector set the benchmarks, the projection feeds the VC method, and once there is revenue the multiples and the DCF read the projected statements. The valuation page shows the football field; Cap Table shows what the round does to ownership and the option pool; Raise sizes the round from burn and the milestone month and runs the before-you-pitch checklist. When the company is ready to be seen, a listing puts the figures in front of approved investors.
Questions
Startup valuation, answered
What is startup valuation?
The price investors and founders agree a company is worth when money changes hands. Pre-money is the value before the new investment; post-money is pre-money plus the round. The round's share of the company is the round divided by post-money, so a $1.5M round at a $6M pre-money is $7.5M post-money and buys 20%.
How do you determine a startup valuation with no revenue?
With methods that do not need revenue. Berkus prices the risks already retired (idea, prototype, team, relationships, early sales). The Scorecard and Risk Factor methods start from the average deal at the stage and adjust for how this company compares. The VC method works backwards from a plausible exit and the return an investor needs. The stage benchmark is the band most rounds at that stage close in. None is the truth; the spread between them is the negotiation.
What is a good valuation for a seed round?
Conventional US seed rounds close at a pre-money of roughly $10M to $25M, scaled by sector. The right number for a specific company depends on traction, the team, the market and how much is being raised: a round should buy enough runway to reach the next milestone while leaving founders with a majority after the option pool.
What is the difference between pre-money and post-money valuation?
Pre-money is the company's value before the investment; post-money is pre-money plus the cash invested. Ownership is always computed on post-money. A SAFE with a post-money cap fixes the investor's percentage at the cap; a pre-money cap leaves it to be diluted by the rest of the round.
How does Replafin value a company?
From the model. Once there is revenue, forward multiples and a discounted cash flow value the company from the projected statements; before that, the pre-revenue methods above run from the stage, the sector and the projection. The valuation page shows every method side by side, the cap table shows what the round does to ownership, and the raise plan sizes the round from burn and the milestone month.
Explore what it could be worth.Then decide what to raise.
Open the workspace, set the stage and sector, and see every valuation method side by side with the cap table and the raise plan. Plans from $200 a month.