1. What is a Pre-Revenue Startup Valuation Calculator?

Definition: This calculator estimates the potential valuation of a pre-revenue startup based on projected revenue and an industry-specific multiplier.

Purpose: It helps entrepreneurs and investors determine a ballpark valuation for startups that haven't yet generated revenue.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( V \) — Valuation (USD)
• \( k \) — Industry-specific multiplier (dimensionless)
• \( P \) — Projected revenue (USD)

Explanation: The projected revenue is multiplied by an industry-specific factor to estimate the startup's potential worth.

3. Importance of Pre-Revenue Valuation

Details: Proper valuation helps in fundraising, equity distribution, and setting realistic expectations for investors and founders.

4. Using the Calculator

Tips: Enter realistic projected revenue and select an appropriate industry multiplier (default 5x). All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: What's a typical industry multiplier?
A: Multipliers typically range from 3x to 10x depending on industry, growth potential, and market conditions.

Q2: How accurate is this valuation method?
A: It provides a rough estimate. Actual valuation considers many factors like team, IP, market size, and competition.

Q3: When would I use a higher multiplier?
A: For high-growth industries (tech, biotech) or startups with strong competitive advantages and large addressable markets.

Q4: How do I determine projected revenue?
A: Based on market research, comparable companies, and realistic growth assumptions for your business model.

Q5: Does this include other valuation methods?
A: No, this is just one approach. Consider using multiple methods (Scorecard, Berkus, etc.) for comprehensive valuation.