Startup valuation calculator
When an investor offers money for a share of the company, the offer sets a valuation: investment ÷ share bought = post-money valuation. Take the investment off for the pre-money.
The formula
Valuation = investment ÷ share of the company it buys
Worked example: £1,000,000 post-money
The example uses the guide's seed round, £200,000 for 20%, with a matching cap table, exit, fund and market.
- £200,000 ÷ 20% = £1,000,000 post-money
- £1,000,000 − £200,000 = £800,000 pre-money
Work out your valuation
Until you type a figure, the results show an example business. Fill in only what you know: from then on every result uses your figures alone, and nothing you type leaves your browser.
Valuation for the example
Example£1,000,000
post-money
- £200,000 ÷ 20% = £1,000,000 post-money
- £1,000,000 − £200,000 = £800,000 pre-money
Formula: Investment ÷ share of the company it buys.
- Pre-money
- £800,000
- You keep
- 80%
Everything your numbers show
For the example business: 27 of 27. Type your own figures to replace them. Select one for its page.
- Valuation£1,000,000post-money
- Pre-money valuation£800,000
- Post-money valuation£1,000,000
- Equity20.0%Equity sold
- Dilution70.0%kept by existing shareholders, down from 100.0%
- Option pool142,857new pool shares
- Fully diluted60.0%Fully diluted ownership
- SAFESimple agreement for future equity89,286shares
- Loan note96,429shares
- Pro rata rights£200,000Pro rata amount
- Liquidation preference£1,000,000to the investor
- Vesting180,000after 18 months
- Cliff120,000at month 12
- SEISSeed Enterprise Investment Scheme£10,000
- EISEnterprise Investment Scheme£6,000
- VCTVenture capital trust£4,000
- TAMTotal addressable market£240,000,000a year
- SAMServiceable available market£60,000,000a year
- SOMServiceable obtainable market£3,000,000a year
- Down roundDown round
- Up roundDown round
- Flat roundDown round
- MOICMultiple on invested capital2.80x
- IRRInternal rate of return22.9%a year
- TVPITotal value to paid-in capital1.50x
- DPIDistributions to paid-in capital0.40x
- Dry powder£24,000,000
How to read your result
At an early stage the valuation is a negotiation, not a formula. This shows what an offer implies, so you can compare offers on the same basis.
Watch out for
Check whether the share is of the shares in issue or fully diluted, and whether an option pool comes out of the pre-money.
Last checked . Estimates only, not financial, tax or legal advice: check your accounts and documents, and take advice before you act. More terms in the startup glossary.