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Startup valuation: VC method, Scorecard and Berkus

Estimate what an early-stage startup is worth with the three methods angel investors and funds use most, compare the results and see what share of the company an investment represents in each case.

Educational simulation. Not investment advice. Results are estimates based on the data you enter and do not replace advice from a qualified professional.

Reviewed on Oct 31, 2026

The round

Example: a B2B startup with early revenue raising a seed round.

1. VC method
2. Scorecard

Enter 100% for average, more for better and less for worse.

3. Berkus

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—Estimated pre-money (average of the three)
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Pre-money by method and investor stake

Bars: company value before the investment under each method. Dots: the percentage the investment buys.

Tap the chart to see the values.

VC method: what drives the value

VC-method pre-money by required return (columns) and exit multiple (rows). The outlined cell is your scenario.

Calculation details

Next step

Take this page’s results to another calculator with the fields already filled in.

How much to raise at this pre-money →

The summary lists your inputs, results, formulas, assumptions and sources. The full report also includes the charts and interpretations, in color. In the print dialog, choose Save as PDF.

Method, assumptions and sources

Formulas

VC method: exit value = revenue × multiple; post-money = exit value ÷ required return × (1 − future dilution); pre-money = post-money − investment
Scorecard: pre-money = regional average × Σ (weight × comparative score)
Berkus: pre-money = Σ (maximum value per factor × % achieved)
Investor stake = investment ÷ (pre-money + investment)

Assumptions and limits

  • Educational simulation. The original Berkus method uses up to $500,000 per factor and is meant for pre-revenue companies. Reference values vary widely by sector, region and market timing.
  • The average only includes methods with a positive pre-money.
  • Early-stage valuation is a negotiation. The methods give a reference range and do not replace the assessment of investors or an advisor.

Official sources and references

Frequently asked questions

How do you value a startup?

With the VC, Scorecard and Berkus methods, comparing their results. Early-stage startups are rarely valued with discounted cash flow because they have no stable profits.

What is the VC method?

It starts from the expected value at exit, divides by the return the fund requires and subtracts future dilution to arrive at today’s post-money value.

How do I read the default example?

The VC method gives a $5.2 million pre-money, the Scorecard $9.4 million and Berkus $1.3 million, for an average of $5.3 million. With a $2 million investment, the investor would get 27.4% of the company, a bit above the usual seed range.

What is the difference between pre-money and post-money?

Pre-money is the value before the investment; post-money is pre-money plus the investment. The investor’s stake is investment ÷ post-money.

How much of the company should I sell in a seed round?

Between 10% and 25% is common, depending on the valuation, the size of the round and market conditions.

Where do I get the exit multiple and the regional average pre-money?

Exit multiples come from recent acquisitions and IPOs in your sector, in reports from banks, funds and venture capital associations. Average pre-money for similar startups appears in round surveys by stage and region and in conversations with angel investors and accelerators.

When should I talk to a professional?

Before signing a term sheet. Valuation is a negotiation, and terms such as liquidation preference, anti-dilution and the option pool can matter as much as the number. A corporate lawyer and an experienced advisor can help you assess the offer.

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How to value a startup: VC method, Scorecard and Berkus

Early-stage startups rarely have stable profits, which makes discounted cash flow of little use. Angel investors and funds use their own methods, based on exit potential, comparison with other startups and risk reduction.

VC method

It starts from the expected value at a future sale (revenue at exit × sector multiple), divides by the return the investor requires (10 to 30 times) and subtracts dilution from future rounds. In the calculator’s example: $40 million in revenue × 3 = $120 million at exit; ÷ 10 and × (1 − 40%) = $7.2 million post-money; minus the $2 million investment, a pre-money of $5.2 million.

The example uses the calculator’s default values; replace them with your own.

Scorecard method

Created by Bill Payne, it starts from the average pre-money of similar startups in the same region and stage and adjusts it by weighted factors: team (30%), market size (25%), product (15%), competition (10%), marketing and channels (10%), need for further capital (5%) and other (5%). A startup with an above-average team and market is worth more than the average.

Berkus method

Created by Dave Berkus for pre-revenue companies, it assigns up to a maximum value to each of five risk-reduction factors: sound idea, prototype, management team, strategic relationships and first sales. The original method uses up to $500,000 per factor.

Pre-money, post-money and ownership

Post-money = pre-money + investment. The investor’s stake is investment ÷ post-money. With a $6.6 million pre-money and a $2 million investment, the investor gets 23.3%. In seed rounds, selling 10% to 25% is common.

Valuation is a negotiation

The methods give a reference range. The final number depends on traction, interest from other investors, market timing and contract terms, such as liquidation preference, that can matter as much as the valuation itself.