Berkus Method Calculator
Value your pre-revenue SaaS startup based on qualitative success factors. Ideal for pre-seed and seed stage companies.
What is the Berkus Method?
The Berkus Method is a qualitative valuation approach for pre-revenue startups. Developed by angel investor Dave Berkus, it assigns monetary value to five key success factors, with a maximum of $500K per factor, capping total valuation at $2-2.5M.
Five Success Factors
Sound Idea (Basic Value)
Does the business model make sense? Is there a clear path to profitability?
Value Range: $0 - $500,000
Assess: Market opportunity, business model viability, revenue potential
Prototype (Reduces Technology Risk)
Do you have a working product or MVP? Can you demonstrate core functionality?
Value Range: $0 - $500,000
Assess: Product stage, technical feasibility, demo-ability
Quality Management Team (Reduces Execution Risk)
Do you have an experienced team with relevant domain expertise?
Value Range: $0 - $500,000
Assess: Team experience, domain knowledge, previous exits
Strategic Relationships (Reduces Market Risk)
Do you have partnerships, pilot customers, or strategic alliances?
Value Range: $0 - $500,000
Assess: Partnerships, LOIs, pilot programs, distribution channels
Product Rollout/Sales (Reduces Production Risk)
Do you have early customers, revenue, or validated demand?
Value Range: $0 - $500,000
Assess: Customer traction, early revenue, waitlist, user engagement
Typical Valuation Ranges
Minimal Traction
$500K - $1M
Idea + prototype only
Moderate Progress
$1M - $1.5M
Team + product + early interest
Strong Position
$1.5M - $2M
All factors well developed
✓ When to Use Berkus
- • Pre-revenue startups
- • Pre-seed and early seed stage
- • No financial history
- • MVP or prototype stage
- • Need quick valuation for angels
⚠ Limitations
- • Highly subjective assessment
- • Caps at $2-2.5M valuation
- • Not suitable for revenue-stage
- • Hard to justify to later investors
- • Regional variations in values
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