Startup Success Series: Pre-Revenue Valuation
The Startup Success Series is designed to provide insight and education on the topics that matter most to the founder community right now.
Each week Startup Victoria hosts a 1-hour webinar for the community, focussing on a specific topic. There’s only so much we can squeeze into 60 minutes, so following each webinar you can access further resources in our Startup Success Series articles.
The Startup Success Series is supported by LaunchVic.
LaunchVic is Victoria’s startup development agency. LaunchVic invests in organisations and projects that empower entrepreneurs to scale innovative companies and deliver new industry benefits to the Victorian economy.
There has been a lot of discussion amongst the Startup Vic founder community in recent weeks about how to properly value a pre-revenue startup. Investment can be difficult to come by as we continue to adjust and get used to the ‘new normal’. Having a strong and accurate pre-revenue value estimate is more important than ever.
A pre-revenue valuation can be more of a negotiation art than science, particularly in the earlier stage of a startup’s existence where so much has to be estimated to come to a figure. Founders typically want a high valuation while investors want a low one to increase their potential return on investment, and finding the right estimate between the two is a crucial part of any startup journey.
Virtual Event Recording
About: Watch the webinar recording below for insights into managing co-founder relationships from 3 successful, local founders. Expert panellists include; Jackie Vullinghs, Investment Manager at AirTree, Dominic Dirupo, Principal at Alphastation Communications and Adam Milgrom, Venture Partner at Giant Leap Fund, with Startup Victoria CEO, Judy Anderson moderating.
3:11 – Introductions
7:07 – What is pre-revenue and pre-revenue startup valuation?
19:48 – Typical guidelines on pre-revenue startup valuation for founders
29:30 – What are the most common components that go into a valuation, and how do you put a dollar value on your startup?
33:09 – Common discussion tips for founders
41:27 – Audience Q&A
AirTree Open Source VC
AirTree is committed to being the Open Source VC – check out their medium page for a huge collection of varied content surrounding venture capitalism and investment. Read here!
LUNA’s Slides on Investment
Many of the links, tools and resources Adam mentions are included in these slides from LUNA’s Investment 101 webinar – take a look here:
We’ve collated blogs and websites that tackle pre-revenue valuation. There is a huge variety available by simply searching the term – here are some of the ones we found that were most interesting:
- How to Value Your Startup – a guest blog piece for Startup Gippsland written by Melbourne Angel’s founder and president Jordan Green.
- Startup maths: What is a valuation and how do I get one? – a SmartCompany article by Standard Ledger founder Remco Marcelis.
- How to Determine the Pre-Revenue Value of a Startup – a list of valuation methods including formulae.
- The Art of Startup Valuation: A Guide for Early-Stage and Pre-Revenue Startups – Seedr’s guide on understanding and undertaking early-stage valuation.