Startup valuation methods: (1) Revenue Multiples — ARR × industry multiple (most common for SaaS), (2) Comparable Transactions — what similar companies raised at, (3) DCF — discounted future cash flows, (4) Berkus Method — qualitative factors scored, (5) Scorecard — compared to average deal in the region, (6) Cost-to-Duplicate — what it would cost to rebuild, (7) VC Method — target return working backwards.
Key Takeaways
- Revenue multiples are most common for SaaS/recurring revenue.
- VC method works backwards from target return.
- Pre-revenue: use Berkus/Scorecard methods.
- Different methods give different results — use 2-3 and negotiate.