What’s Your Startup Worth?

With the rise of entrepreneurship, startups have emerged in all sorts of industries and sectors. These business ventures are no longer viewed with skepticism and are instead seen as promising initiatives with the potential to fully develop their underlying concepts. Of course, finding funding for a startup doesn’t always come easy. In fact, entrepreneurs need to gain a valuation of their startup before seeking prospective funding options to determine what their startup is worth.

Several startup valuation methods may be used for this very purpose. Financial analysts resort to popular startup valuation methods such as the Berkus Method, Scorecard Valuation Method, Book Value Method, and Liquidation Value Method to get the most accurate values.

How to Determine the Value of a Startup Company

Want to use our company valuation software to determine the value of a startup company? Our blog shares comprehensive details on the best startup valuation methods to use for this process. Get in touch with us today to learn more about how this works!

Berkus Method Calcualtor

02 September 2021 | Written by COMPANY VALUATION TEAM . Published in Startup Company Valuation. Read 6894 times.

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The Berkus method, invented by the angel investor Dave Berkus, is a company valuation method mainly used for startups in their early stages.

The valuation of an early-stage company can not be done using the standard valuation method. In most cases, the company has no products, and as a result - no sales. Even if it does have a product - it is probably only the minimum viable product (MVP). Minimum Viable Product or MVP is the most basic version of the product which the company wants to launch in the market.

An illustration of starup valuation using berkus method

Berkus Valuation Method

Alternative valuation approaches were adopted by practitioners - the Scorecard Valuation Method, the Risk Factor Summation Method and the Berkus Valuation Method. In the Equitest Valuation platform, we found that the Berkus method is superior and more robust among the two. We, therefore, included the Berkus Method calculator in our business valuation software.

A Print Screen of Berkus Method Calculator

The value of the company, according to Berkus valuation method, is calculated by a detailed assessment of five critical success factors: (1) Basic value, (2) Technology, (3) Execution, (4) Strategic relationships in its core market, and (5) Production and consequent sales.

InfInfographics: The five key success factors according to Berkus Method

An InfInfographics of Berkus Valuation Method

Equitest, in a valuation platform and business valuation software, adopted several valuation methods - the Discounted Cash Flow (DCF), Berkus Method, Book Value Multiple, Revenue Multiple, Earning Multiple, and Asset Based Valuation. You are welcome to try our business valuation software for free.

Take a look at our online valuation tool and what it offers today.