Valuation: Step up Valuation Method

Valuation: Step up Valuation Method

February 6, 2020 by investor

In raising funding, valuation is a key number the CEO and investor must come to agree with. 

As a startup you must determine your target valuation.  There are several methods. One method is called Step up Valuation

It uses ten factors. Each factor adds $250K to the valuation

To calculate your total pre-money valuation add $ 250,000 for each:

– Total market size over $500M

– Business model scales well

– Founders have significant experience

– More than 1 founder committed full-time

– MVP developed, customer development underway

– Business model validated by paying customers

– Significant industry partnerships signed

– Execution roadmap developed and being achieved

– IP issued or technology protected

– Competitive environment favorable

You may give partial credit for items that have some progress made.

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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.

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