Fundraising

Valuation

The process of determining the current worth of a company, expressed as pre-money or post-money valuation during fundraising.

What is Valuation?

Valuation is the estimated worth of your company. In startup fundraising, there are two key terms:

Pre-Money Valuation

Company’s value BEFORE the investment is added.

Post-Money Valuation

Company’s value AFTER the investment is added. Post-Money = Pre-Money + Investment

Common Valuation Methods

  • Comparable Companies: Based on similar startups
  • Discounted Cash Flow: Future cash flows
  • Revenue Multiple: Revenue × industry multiple
  • Venture Capital Method: Based on expected exit

Factors Affecting Valuation

  • Team experience and track record
  • Market size and growth
  • Traction and revenue
  • Competitive landscape
  • Investment stage

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