Growth & venture-backed companies
Startup and fundraising valuation
A round price is a negotiated outcome. A valuation is an evidenced opinion. Founders, investors and auditors need the second one when the first has to be explained — to a board, an audit team, a tax officer or a later acquirer.
- Typical clients
- Seed to pre-IPO companies, venture and corporate investors, family offices
- Purposes served
- Round negotiation support, share-based payment, investor NAV reporting, historical clean-up, tax
- Core analysis
- Total equity value, share-class waterfall, ordinary versus preferred allocation
- Methods
- Discounted cash flow, market multiples, backsolve from recent transactions, option-pricing allocation
- Frequency
- Per grant or per reporting date; refreshed after each material round
- Cross-border
- 409A-style analysis available for US-linked structures
Where independent analysis earns its fee
Before and during a round
Investors discount founder projections by habit. An independent analysis that has already stress-tested the model, benchmarked the business against comparable companies and set out the assumptions in a defensible structure changes the conversation from “justify your number” to “discuss these drivers”. It also surfaces the questions a lead investor will ask, early enough to answer them properly.
After the round, for the accounts
A priced round creates immediate reporting consequences. Convertible instruments may need separating into components, preference shares may not be equity at all under the classification rules, and any options granted around the same time need a grant-date fair value derived from the new capital structure. These are the items that surface in the first audit after a raise.
For investors holding the position
Funds and corporate investors have to carry unlisted holdings at fair value at each reporting date, and cost is not a durable answer. We provide portfolio-level fair value with consistent methodology across positions and periods, so movements reflect the underlying businesses rather than changes in approach.
Cleaning up history
Companies approaching an exit or a listing frequently discover that past share issues, option grants and convertible conversions were never valued, or were valued on a basis that will not survive reporting accountant review. Reconstructing point-in-time valuations is entirely feasible — using only information available at each historical date — and it is far cheaper to do it before a process starts than during one.
Why the cap table is the valuation
Once a company has issued preference shares, total equity value tells you almost nothing about what any individual share is worth. Value is distributed across classes according to the contractual terms, and those terms differ sharply in their economics:
- Liquidation preference — how much comes off the top before ordinary shareholders see anything, and at what multiple
- Participation — whether preferred holders take their preference and then share in the remainder, and whether that participation is capped
- Conversion — the point at which converting to ordinary beats taking the preference
- Anti-dilution — full ratchet or weighted average adjustments that alter the split in a down round
- Seniority — whether later rounds rank ahead of earlier ones or share pari passu
Working through this waterfall, and then allocating value across the classes using an option-pricing or scenario-based framework, is what produces a defensible ordinary share value. It is also why a valuation cannot be done without the constitution and the shareholders’ agreement, not just the cap table spreadsheet.
Methods that hold up for early-stage companies
| Situation | Primary method | Cross-check |
|---|---|---|
| Recent arm’s length priced round | Backsolve to the transaction price through the share-class waterfall | Market multiples on forward metrics |
| Revenue-generating, forecastable unit economics | Discounted cash flow with scenario weighting | Comparable company multiples |
| Pre-revenue with a technical or regulatory milestone path | Risk-adjusted scenario analysis on milestone outcomes | Comparable transaction evidence in the same stage band |
| Round is stale or terms have changed materially | Fresh equity value with the backsolve used only as a reference point | Sensitivity across exit timing and volatility |
On business plans and generated text. Length is not evidence. What a valuer — and an investor — needs from a plan is narrow and specific: who the team are and what they have done before, how the business actually makes money and why that is defensible, what is genuinely differentiated about the product, a realistic expansion sequence, and a budget showing what the money raised will be spent on. A plan generated wholesale from a prompt tends to be fluent and interchangeable, and interchangeable is the opposite of what a valuation needs to work with. Use the tools to draft; supply the substance yourself.
Sectors we see most
Software and platform businesses, artificial intelligence and data companies, fintech and payments, biotech and medtech, deep tech and advanced manufacturing, digital assets and blockchain infrastructure, consumer brands and marketplaces. Each carries its own contested assumption — retention and expansion for software, clinical or regulatory probability for life sciences, take rate and cohort economics for marketplaces, protocol adoption for digital assets.
Detail on our life sciences work is on the main site under biotech and life science valuation, and our broader startup practice at valuation of startups.
What to have ready
- Constitution, shareholders’ agreement and any side letters that affect economics
- Full cap table including options granted, options reserved and any outstanding convertibles
- Audited financial statements and recent management accounts
- Financial model with the assumptions visible, plus prior-year forecasts against actuals if available
- Term sheets or subscription agreements for recent rounds
- A short note on the market, the competitive set and the next twelve months of plan
Frequently asked questions
Can you value a pre-revenue startup?
Yes, though the analysis looks different. Without cash flows to discount, value rests on scenario analysis around identifiable milestones, evidence from comparable transactions at similar stages, and where a recent arm's length round exists, a backsolve through the share-class waterfall. The report is explicit about the uncertainty rather than presenting a single figure with false precision.
Our last round set a price. Why do we need a valuation?
The round price tells you what one investor paid for one class of shares on one date, usually with rights that ordinary shares do not carry. It does not tell you the value of an ordinary share for option grants, the fair value of the position for an investor's own accounts, or the value at a date other than the closing date. Those each require analysis built on top of the round, not the round price itself.
How do convertible notes and SAFEs affect the valuation?
They sit outside the cap table until they convert, but they carry economic entitlements -- discounts, valuation caps, most-favoured-nation clauses -- that dilute existing holders on conversion. A valuation that ignores outstanding convertibles overstates the value of existing shares. The instruments themselves may also require separate fair value measurement in the company's own accounts.
Do investors accept an independent valuation?
Investors do not outsource their own pricing decision, and no valuation should be presented as though they should. What an independent analysis does is establish a documented, evidence-based reference point and remove arithmetic and assumption disputes from the negotiation, so the discussion is about the business.
What is a backsolve valuation?
It works backwards from an observed transaction: given the price a new investor paid for a specific class of shares, and given the rights attaching to every class, it solves for the total equity value consistent with that price. That total is then reallocated across all classes to derive the value of ordinary shares. It is the most commonly accepted approach where a genuine arm's length round has closed recently.
Raising, granting or reporting?
Send the cap table, the shareholders’ agreement and the date you need the valuation as at. We will tell you what is required and what it costs.