Pre-Money Valuation is how much your startup company is worth before the investment from investors flows in.
The Pre-Money Valuation is a piece of critical information that you as the owner of your startup should be able to provide to Venture Capitalists and Angel Investors. Moreover, valuing a startup without any existing revenue can be difficult, with a certain degree of subjectivity. The value of a startup, especially at the early stages, cannot be determined using the traditional methods of financial projections and quantitative analysis.
To solve this problem, in Graypes we have developed a composite set of sophisticated algorithms to come up with a realistic valuation.
Ιn Graypes we have developed a calculation methodology based on a composite combination of four (4) techniques:1. Scorecard Valuation Method
Also known as the Bill Payne valuation method is one of the most preferred methodologies. This method compares the startup (raising angel investment) to other funded startups modifying the average valuation based on factors such as region, market, and stage.2. CheckList Valuation Method
The CheckList method, created by Dave Berkus, is similar to the ScoreCard method, having a fixed value amounts attached to each of the elements. This method considers a startup individually, without taking into account market or competitive environment.3. Venture Capital Method
It was first described by Professor Bill Sahlman at Harvard Business School in 1987 in a case study and has been revised since. The concept is simply based on:
Return on Investment = (Terminal Value) ÷ (Post-Money Valuation)
Pre-Money Valuation = Post-Money Valuation – Investment4. Graypes Venture Capital Method
This is a parallax of the Venture Capital Method, based on the consideration of the P/E (Price per Earning) Rates of public companies in the industry of the startup under valuation.The Venture Capital, Graypes Model is based on the simple formula:
( Company Price Y5 ) = ( Company Earnings Y5 ) X ( Industry P/E )
Pre-Money Valuation = ( Company Price Y5 ) ÷ ROI
Using Graypes, you can have ready for your startup a Pre-Money Valuation Report in 24 hours.
The cost of this report is as per our pricing list.
For more details and information of the Graypes Pre-Money Valuation methodology, you can read the following documents created by our support team:1. Scorecard Valuation Method Documentation 2. CheckList Valuation Method Documentation 3. Venture Capital Method Analysis 4. Graypes Venture Capital Proprietary Method Analysis