Early Stage Startup Valuations
Wisdom of the Crowds is how Early Stage Startups are valued
Discounted Cash Flow (DCF), First Chicago, VC Method are all used for late stage funding (Series B and onwards), or only for the purpose of statutory compliance in early stage valuations.
Transaction Comparables are more suited to determine Pre-Seed, Seed and Series A valuations, which are adjusted using the following factors.
- Stage of the Company
- Competition with Other Funding Sources
- Experience of the Entrepreneurs and Leadership Team
- Size and Trendiness of the Market
- VC’s Natural Entry Point - accelerator, pre-product, series A
- Numbers on Metrics
- Current Economic Climate
- Liquidity and Size of the VC Fund
You can get Transaction Comps from databases such as Tracxn or the MCA website.
