Valuation sets how much equity you dilute per rupee raised. At ₹2Cr pre-money with a ₹50L raise, you give away 20% of your company. At ₹5Cr pre-money, the same raise results in only 9% dilution — a significant difference in long-term founder ownership.

Investors arrive at their own valuation independently before any conversation. Knowing your defensible range prevents you from under-valuing your company and entering negotiations without a floor.

Different methods suit different stages. Pre-revenue founders rely on the Berkus Method to score qualitative risk factors, while post-revenue startups use Revenue Multiples anchored to ARR and sector benchmarks. Matching the right method to your stage ensures credibility.

Developed by angel investor Dave Berkus, the Berkus Method is widely used for pre-revenue startups where traditional financial metrics are unavailable. It values the business by scoring five key risk dimensions.

5 Risk Factors — Each Worth Up to ₹5L

1. Sound Idea — Basic value and product risk. Does the idea address a real problem with a credible solution?
2. Prototype — Reducing technology risk. Is there a working demo, MVP, or proof of concept?
3. Quality Management Team — Reducing execution risk. Does the team have domain expertise and complementary skills?
4. Strategic Relationships — Reducing market risk. Are there partnerships, letters of intent, or distribution channels in place?
5. Product Rollout or Sales — Reducing financial and production risk. Is there any early revenue, pilot customer, or signed contract?

The maximum theoretical valuation under Berkus is ₹25L (5 factors × ₹5L). In the Indian market context, adjust the maximum per factor to ₹3L–₹8L depending on city tier and sector to reflect local comparable deal sizes.

Pre-money valuation is the value of your company before the investment is made. Post-money valuation is pre-money plus the investment amount — it reflects the company's value immediately after funds land.

Example: ₹5Cr pre-money + ₹1Cr raise = ₹6Cr post-money. The investor owns ₹1Cr / ₹6Cr = 16.7% of the company.

A common founder mistake is agreeing to a valuation in term sheet discussions without specifying whether the figure is pre-money or post-money. The distinction shifts dilution materially and must be explicit in every conversation and document.

• Team quality and completeness — Investors bet on people first. A complete founding team with domain expertise commands a premium.
• Market size (TAM / SAM / SOM) — Large addressable markets justify higher multiples and growth premiums.
• Revenue traction and growth rate — Month-over-month growth above 15–20% signals product-market fit and investor confidence.
• NRR / customer retention — Net Revenue Retention above 100% means existing customers expand revenue without new acquisition spend.
• Competitive moat — IP, network effects, switching costs, and regulatory advantages reduce competitive risk and lift valuation floors.
• Geography and sector trends — Hot sectors (AI, climate tech, fintech) and Tier-1 city presence attract higher comparable multiples.
• Investor demand and deal momentum — Competing term sheets and FOMO from multiple investors can compress timelines and push valuations above fundamentals.

Corpfy's Startup Valuation dashboard runs four valuation methods simultaneously — Berkus (pre-revenue), Scorecard (weighted factors), VC Method (exit value ÷ target return), and Revenue Multiple (ARR × stage multiple) — and recommends a range based on your inputs. India stage benchmarks are in ₹: Pre-Seed ₹50L–2Cr, Seed ₹2–15Cr, Pre-Series A ₹15–50Cr, Series A ₹50–200Cr.

What you get in the dashboard