Scorecard method

A pre-revenue valuation approach that adjusts the typical pre-money valuation of comparable local deals using weighted comparisons of the company on factors such as team, market and product.

Example

A 4,000,000 benchmark multiplied by a weighted factor of 1.155 gives 4,620,000.

Important

The benchmark and every comparison are judgements, not measurements.

Related terms

• Pre-Money Valuation — A company's agreed value immediately before a financing round's new money is added.
• Comparable companies — Businesses similar enough to the one being valued that the prices paid for them are evidence about its price. Similarity means growth, margin, capital intensity and customer concentration - not industry label.

Lessons that explain it

• The scorecard method starts from what similar deals were priced at — The scorecard method takes the typical pre-money valuation of comparable early-stage deals in a region and adjusts it up or down by comparing the company on weighted factors. (10 min)

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