Pricing a startup is part art, part math. Unlike a public company with a share price, an early-stage business has no traded stock, no guaranteed earnings, and often no profit at all. The revenue-multiple approach is the fastest way to anchor a real number: take your annual recurring revenue (ARR), multiply it by a multiple that comparable companies are raising at, and you get a post-money valuation. This startup valuation calculator does exactly that, then breaks out the pre-money valuation, the investor's ownership slice, and the dilution you and your founders will take on.
Adjust the three sliders and every figure updates instantly. Use it to sanity-check a term sheet, model what a larger round does to your cap table, or argue for a higher multiple when investors lowball you.
How to Use
- Enter your Annual Revenue (ARR). Use the last twelve months of actual revenue if you have them; otherwise use the realistic projection for the next twelve months. Recurring, subscription, or contracted revenue counts the most — one-time project revenue usually commands a much lower multiple.
- Set your Target Revenue Multiple. SaaS companies with strong net retention often clear 10x–20x ARR, while service businesses or hardware startups usually trade at 1x–5x. If you do not know your sector's multiple, look at the last ten funding rounds of companies at your stage and size and take the median.
- Enter the New Investment Raised — the total cash the new investor(s) will wire at close. This is the number that dilutes you.
- Read the result card:
- Post-Money Valuation — what the company is worth immediately after the cash lands.
- Pre-Money Valuation — what it was worth before the cash (post-money minus the investment).
- Investor Ownership — the percentage of the company the new money buys.
- Founder / Existing Ownership — what you and earlier holders keep after the round.
The math is intentionally simple so you can defend it on a whiteboard. If an investor's offer implies a multiple that is way off the sector benchmark, you now have a concrete number to push back with.
The Formula Behind the Number
The calculator uses the market-multiple variant of the classic VC method:
Post-money = Annual Revenue × Revenue Multiple Pre-money = Post-money − Investment Investor Ownership % = Investment ÷ Post-money × 100 Founder Ownership % = 100 − Investor Ownership %
Worked example on the default inputs: $500,000 ARR at a 10x multiple gives a $5,000,000 post-money valuation. A $1,000,000 investment buys the investor exactly 20% ($1M ÷ $5M), leaving the founders and earlier holders with 80%. The pre-money valuation — the number you actually negotiate — is $4,000,000 ($5M post minus $1M of new cash).
Notice the key insight: the multiple only sets the post-money valuation. The dilution you suffer is set entirely by how much money you raise. Raising $2M instead of $1M at the same $5M post-money doubles the investor slice to 40% and cuts founders from 80% to 60%. That is why how much to raise is the single most founder-leveraged decision in a round.
Choosing the Right Revenue Multiple
The multiple is where most of the negotiation happens, because it is the least precise input. A few rules of thumb used by seed and Series A investors:
- Top-tier SaaS (net revenue retention > 110%, strong growth): 15x–25x ARR, sometimes higher for breakout companies.
- Solid mid-market SaaS (70–100% YoY growth, healthy retention): 8x–15x ARR.
- Early / pre-scale SaaS or marketplace: 3x–8x ARR.
- Services, hardware, or non-recurring revenue: 0.5x–2x ARR.
If you are pre-revenue, the revenue-multiple method has nothing to anchor on. Investors will instead use the Berkus method, Scorecard method, or Risk Factor Summation — all of which start from a base of roughly $1M–$2M and adjust upward for team, market, product, and traction. Those methods produce a pre-money number directly; plug that pre-money into this calculator alongside your projected ARR to back into the implied multiple and see whether it is defensible.
Examples
Example 1 — The default seed round. A SaaS founder has $500,000 ARR growing 80% year over year and is raising $1,000,000 at a 10x multiple. Post-money lands at $5,000,000, pre-money at $4,000,000, the new investor takes 20%, and the founders keep 80%. This is a clean, standard seed structure.
Example 2 — A Series A at scale. A company with $3,000,000 ARR and 150% net retention raises $4,500,000 at a 15x multiple. Post-money is $45,000,000, pre-money is $40,500,000, the new investor owns 10%, and founders plus earlier holders retain 90%. The high multiple means a relatively large round barely dilutes the team.
Example 3 — A small bridge at low multiple. A bootstrapped business with $1,200,000 of mostly project-based revenue raises $800,000 at a 6x multiple. Post-money is $7,200,000, pre-money is $6,400,000, the investor takes about 11.11%, and founders keep 88.89%. The low multiple reflects the non-recurring nature of the revenue.
FAQ
What is the difference between pre-money and post-money valuation?
Pre-money valuation is what investors think the company is worth before their cash enters the bank. Post-money valuation is the company's worth immediately after the investment lands — it is simply pre-money plus the cash invested. If you raise $1M at a $4M pre-money valuation, the post-money is $5M and the investor owns $1M ÷ $5M = 20%.
What revenue multiple should my startup get?
It depends on sector, growth, and retention. Seed and Series A SaaS companies with net revenue retention above 110% often price at 10x–20x ARR; mid-quality SaaS at 5x–10x; services or one-time-product businesses at 1x–3x. Look at recent comparable rounds in your niche rather than picking a number out of thin air.
How much do founders get diluted in a seed round?
Typical seed rounds sell 15%–25% of the company. Raising $1M at a $5M post-money valuation sells exactly 20%; raising $2M at the same post-money sells 40%. As a founder, your control and future upside are protected by keeping the investor slice near 20% rather than raising more than you need.
Is this calculator suitable for pre-revenue startups?
Not directly. The revenue-multiple method needs at least some revenue to anchor on. Pre-revenue deals are usually priced with the Berkus, Scorecard, or Risk Factor Summation method, which build a pre-money valuation from team, product, market, and traction factors rather than from ARR.
Does raising more money at the same valuation hurt me?
Yes, in a specific way. Raising a bigger round at the same post-money valuation buys the investors a larger percentage and dilutes founders more, even though the company's headline valuation does not change. Raise only what you need to hit the next clear milestone, and negotiate the multiple rather than the cheque size.
Does this calculator include option pool dilution?
No. The output shows only the new-money dilution from this round. In practice, term sheets often also carve out an expanded employee option pool before the round, which dilutes the existing shareholders (founders and early employees) on top of the investor slice. Ask whether the pool is pre-money or post-money before comparing offers.
Disclaimer
This startup valuation calculator is provided for informational purposes only and does not constitute financial, legal, tax, or investment advice. Valuations produced by the revenue-multiple method are rough estimates based on the inputs you enter; actual venture deals are priced by negotiation, comparables, and detailed diligence that no calculator can fully capture. Always consult a qualified startup lawyer and an experienced startup accountant or CFO before signing a term sheet.