Startup valuation

Startup valuation – determine the value of an innovative business venture

What is a startup valuation?

Startup valuation is the process of determining the value of a young company that often does not yet have a long financial history, but has significant growth potential, an innovative product, a strong team and a sound business model. Startup valuation differs from traditional business valuation – here, future prospects, investment risk and scalability are key.

A properly prepared valuation supports discussions with investors, planning subsequent funding rounds and determining the value of shares.

When is a startup valuation needed?

A startup valuation is particularly important in situations such as:

  • preparation for a funding round (pre-seed, seed, Series A, B…),
  • the entry of a private investor or a venture capital fund,
  • the sale of shares or the admission of a new shareholder,
  • setting the terms of the term sheet and investment agreement,
  • contributing the startup to a company as a contribution in kind,
  • determining value for exit planning,
  • disputes between founders or succession.

Who is a startup valuation intended for?

The service is aimed at:

  • founders and management teams seeking to determine the fair value of their company,
  • technology startups and innovative companies at various stages of development,
  • investment funds, VCs and business angels assessing investment potential,
  • legal and tax advisers requiring an independent valuation for documentation purposes,
  • holding companies planning to contribute a startup as a contribution in kind.

How does the startup valuation process work?

Our step-by-step approach:

We help startups navigate the entire valuation process – from analysing the business model to producing a report that meets investors’ expectations. Our support includes:

  1. Business model assessment – analysis of the product, market, competitive advantages and growth strategy.
  2. Financial and non-financial analysis – we assess revenue, costs, KPIs, team structure and stage of development.
  3. Selection of a startup valuation method – depending on the stage and available data:
    • the Berkus method,
    • Scorecard,
    • Venture Capital method,
    • DCF (discounted cash flow),
    • market multiples (revenue multiple, EBITDA multiple).
  4. Preparation of a valuation report – including a description of the assumptions made, the selected valuation method and the concluded value.

Why should you commission us to value your startup?

We specialise in the professional valuation of young companies and startups, supporting entrepreneurs at every stage of development. Our valuations are reliable and prepared in a way that is clear to investors, venture capital funds and business advisers.

  • Extensive experience in startup valuation – we work with startups in the IT, SaaS, e-commerce, medtech, fintech and other sectors, understanding the unique characteristics of early-stage businesses
  • Knowledge of the venture capital market – we know what information is key for investors and how to prepare a valuation that meets their expectations
  • A flexible approach to valuation – we select the valuation method appropriate to the startup’s stage of development, from seed to growth
  • Transparent valuation reports – prepared in a clear and accessible manner, ready to be presented to investors, funds and advisers
  • Support in investment transactions – we assist with negotiations, analysis of investment terms and preparation of documentation to support business decisions

Thanks to our experience, startup valuation becomes a valuable tool for investment decision-making, minimising risk and facilitating the raising of capital.

Benefits of a professional startup valuation

  • A reliable and objective valuation of the company’s value,
  • A stronger negotiating position when attracting investors,
  • Clear determination of share values,
  • Ability to use the valuation in investment, legal and court documentation,
  • A basis for planning further growth, subsequent funding rounds and exits.

Our experience

We have carried out startup valuations for, amongst others:

  • technology firms developing SaaS platforms,
  • e-commerce companies and marketplaces,
  • medical and biotech startups,
  • fintechs and mobile apps,
  • innovative companies operating in B2B and B2C models.

Our valuations have been used in transactions with venture capital funds and business angels, in contribution-in-kind transactions, and in ownership disputes.

FAQ

What are the most commonly used methods for valuing a startup?

Startup valuation depends on the company’s stage of development, the availability of financial data and the purpose of the valuation. The most commonly used methods for valuing startups are:

  • the Berkus Method – assesses startup value based on five key factors,
  • the Scorecard Method – compares the startup to other similar companies,
  • the market multiples method – uses market ratios (e.g. EV/Revenue),
  • DCF – Discounted Cash Flow – valuation based on projected cash flows,
  • the Venture Capital Method (VC Method) – focuses on the investor’s expected return,
  • the real options method – assesses the value of future decision-making flexibility.

Can a startup with no revenue be valued?

Yes – a startup with no revenue can also be valued. In such cases, qualitative methods are used, which take into account:

  • the value of the team and the founders’ experience,
  • the market potential of the product or service,
  • innovation and technological advantages,
  • the stage of product development achieved (e.g. MVP, prototype),
  • the monetisation strategy and scalability of the business model.

This approach allows the company’s value to be determined at an early stage of development, even before revenue is generated.

Is a startup valuation necessary before every funding round?

In practice, a startup valuation prior to an investment round is highly recommended. Investors, including venture capital funds and business angels, usually expect a reliable and justified valuation that:

  • serves as the basis for share negotiations,
  • determines the pre-money and post-money valuations,
  • influences the terms of the investment agreement (term sheet),
  • facilitates the preparation of documentation and corporate arrangements.

A well-prepared valuation increases the chances of securing funding on favourable terms.

How long does it take to prepare a startup valuation?

The time taken to prepare a valuation depends on the startup’s stage of development, the complexity of the business model and the availability of data. The standard timeframe is 1–3 weeks, assuming smooth cooperation and complete documentation.

Do you also assist with negotiations with investors?

Yes – as part of our services, we offer comprehensive support in dealing with investors, including:

  • preparing presentations and key materials,
  • analysis of investment terms and term sheet proposals,
  • participation in negotiations and support during the due diligence process,
  • advice on shareholding structure and safeguarding founders’ interests.

What are the most commonly used multiples in startup valuations?

In the comparative (market multiples) approach, the most commonly used market ratios are:

  • EV/Revenue – enterprise value to revenue,
  • EV/EBITDA – enterprise value to EBITDA,
  • EV/EBIT – enterprise value to operating profit,
  • EV/FCF – enterprise value to free cash flow.

The choice of multiples depends on the business model, available benchmarks and the industry in which the startup operates.