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Startups valuation. Is there a magic formula?

SeedBlink Knowledge

Pre-revenue start-up valuation can be a tricky endeavour.

The rise of entrepreneurship has given birth to one of the most widely employed terms in the history of business and finance: ‘start-ups’. A start-up is basically a baby business that began with an idea, and it is now looking for capital to grow and mature.

Start-ups, pretty much like babies, need money to expand themselves, test ideas and develop a team. To raise money, a start-up needs to be valued and therefore, understanding how the start-up valuation process works is very important for any serious and committed entrepreneur.

Pre-revenue start-up valuation can be a tricky endeavour. There are many things to take into consideration, from the management team and market trends to the demand for the product and the marketing risks involved. And here’s the thing: After evaluating everything, even with the most effective pre-money valuation formula, the best you can hope for is still just an estimate. It’s important to keep that in mind. Within the links below, you can find eight formulas you can start with.

Startup Valuation — The Ultimate Guide to Value Startups 2020 — Pro Business Plans
Startup Valuation Methods — Startups.com
How to Value a Startup Company With No Revenue — MassChallenge.org
How to Value Your Startup — 8 Formulas to Get You Started — The Hub
The Art of Valuing a Startup — Forbes
Determining Seed Startup Valuation — Forbes
The Most Common Ways On How To Valuate Early Stage Companies — EU Startups

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Investing in start-ups involves risks, including loss of capital, illiquidity, dilution, lack of dividends. It is suitable only for investors capable of evaluating and bearing those risks. In any event, it should be done only as part of a diversified portfolio (meaning a portfolio in which investment in start-ups represents only a fraction of the total investments or assets). Before investing please read the risk warnings available at https://seedblink.com/generalterms as well as the risks related provisions of the investment facilitation agreement that will be provided to you for the relevant round. SeedBlink is not responsible for any information provided by the start-ups, even if distributed through or by SeedBlink. SeedBlink does not endorse any start-up for investment nor does it advise you on the merits of your investment. Seedblink does not provide to you any other advisory services. The decision to invest is yours only. If you require help in evaluating a decision to invest, you should consult a professional adviser. The messages and documentation you receive from SeedBlink or the start-ups have been neither verified nor approved by the Romanian or the European authorities. Nothing in this message shall be considered an offer to sell, or a solicitation of an offer to buy, any security to any person in any jurisdiction to whom or in which such offer, solicitation or sale is unlawful.