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