This updated edition includes several new features, including:

• The Startup Valuation Explorer calculator


• Expanded coverage of Valuation Methods


• Responding to investor questions about your valuation


• Understanding option pool impact on your valuation

For many early-stage entrepreneurs assigning a pre-money valuation to your startup is one of the more daunting tasks encountered during the fundraising quest. This guide provides a quick reference to all of the key topics around early-stage startup valuation and provides step-by-step examples for several valuation methods.

In more detail, this Founder’s Pocket Guide helps startup founders learn:

• What a startup valuation is and when you need to start worrying about it.


• Key terms and definitions associated with valuation, such as pre-money, post-money, and dilution.


• How investors view the valuation task, and what their expectations are for early-stage companies.


• How the valuation fits with your target raise amount and resulting founder equity ownership.


• How to do the simple math for calculating valuation percentages.


• How to estimate your company valuation using several accepted methods.


• What accounting valuation methods are and why they are not well suited for early-stage startups.