Startup Valuation: How to Calculate It - Startups 101

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Published 2021-01-14
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When you speak to early-stage founders, they often don’t understand how they can either determine a reasonable valuation for their friends & family, seed, or Series A round, or judge if an offer they receive is “fair and reasonable.” There are a lot of moving parts to valuation, and things vary across rounds. In this video, we cover the details and cover what typical numbers look like for these rounds.

Thanks to our friend and today host Steve Barsh from @DreamItVentures

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0:00 Early Stage Valuation - Intro
1:07 Early Stage Valuation - Friends and family investors
2:40 Early Stage Valuation - Angel/seed round
3:39 Early Stage Valuation - Convertible Notes
4:52 Early Stage Valuation - Cap and discount rate
5:37 Early Stage Valuation - SAFE
6:11 Early Stage Valuation - Valuation
7:00 Early Stage Valuation - A few things to consider
8:30 Early Stage Valuation - Founder Vesting
10:07 Early Stage Valuation - How much are you raising?

All Comments (21)
  • I love how this video discusses everything except the valuation of a start up. It is especially striking that the title is called How to value a startup and then not a single valuation method is actually discussed.
  • The collapse of Margin debt leads to a decrease in stock prices and trigger a wave of selling as investors try to cover their losses, Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. Hence what are the best stocks to buy now or put on a watchlist? I’ve been trying to grow my portfolio of $145K for sometime now, my major challenge is not knowing the best entry and exit strategies ... I would greatly appreciate any suggestions
  • @jakeradler
    Would love a series that focuses on upcoming major startups. Or even a series that talks about incubators and accelerators in detail.
  • @silicon.
    Another fantastic video for entrepreneurs- that people charge $1000s of dollars for,
  • @jason9875
    This video couldn’t of had better timing, let’s just say I have a big week next week.
  • @stevebarsh7727
    Thx Elliot Levy (Dreamit) for pointing out a mistake I made at ~6:40. I said "if the SAFE valuation cap were a bit lower, say $4.5m". Oops! $4.54m > $4.0m. My "lower" example should have been something like "for example, $3.8m". Apologies for not catching that when we wrote, shot, and edited the video!
  • Just discovered this channel today. Very helpful to understand the basics of raising capital.
  • @Paul_Marek
    We raised almost $750K from friends and family over 6 years in 6 different rounds. The first $350K was raised at $2.5M valuation, the rest was raised at $12M valuation. Seed round of $3M coming up at $25M valuation.
  • @w2rsharma
    Valuable information shared in simplest way!
  • Fantastic video. Thanks! I think it's ironic that the SAFE was designed to put off the "valuation" argument between investor and entrepreneur but if you use the Safe that has the valuation cap, you're right back into the fray....I tend to like the discount rate and MFN SAFE's and then it's up to the entrepreneur to sell the idea....
  • Thank you so much guys. This is invaluable information for us technical founders.
  • @UcheOgbiti
    I think it's a perfect time for a book on everything about starting and running startups
  • @NRNLab
    Loved it, one of the best presentation and to quite some details and accurate, which I already read abt havecame up here. Thank you very much.