Startup valuation

Startup valuation encompasses the specialised methods for determining the equity value of early-stage, high-growth companies with limited or no profitability history. Standard methods include: the VC method (exit value / (1+target IRR)^n), the scorecard method (adjustment factors applied to sector median pre-money), the Berkus method (milestone-based value attribution), the First Chicago method (probability-weighted scenario DCF) and, for later-stage startups, ARR multiples and traditional DCF. In startup valuation, TRL, MRL and phase of development are key risk parameters determining the discount rate.

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Example: a Swiss medtech startup at Series A with CHF 1.2 million ARR and TRL 7 (validated prototype) is valued using three methods: VC method (CHF 8.5 million), ARR multiple 8x (CHF 9.6 million), scorecard (CHF 8.2 million). Weighted average: CHF 8.8 million pre-money — a defensible range supported by sector comparable fundraising rounds. See our dedicated startup valuation guide.

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Hectelion values startups at every development stage using methods adapted to their risk-return profile, integrating TRL and MRL as valuation parameters.