Scorecard Valuation Method
Value your pre-revenue startup by comparing to funded companies in your market. The Bill Payne Scorecard Method for angel investors.
What is the Scorecard Method?
The Scorecard Valuation Method, developed by angel investor Bill Payne, values pre-revenue startups by comparing them to similar companies that have recently been funded. It starts with a baseline valuation (average for your region/industry) and adjusts it based on 7 key factors.
Unlike the Berkus Method which assigns absolute dollar values, Scorecard uses percentage adjustments, making it more flexible and market-responsive.
How It Works
Find Baseline Valuation
Research average pre-money valuations for similar startups in your region and industry. Use data from AngelList, Crunchbase, or local angel groups.
Typical Baselines:
Silicon Valley SaaS seed: $2-3M
US (outside SV) seed: $1.5-2M
Europe seed: $1-2M
Score 7 Key Factors
Rate your startup on each factor compared to average funded companies. Each factor gets a percentage adjustment (typically 60-150%).
Excellent: 120-150% (top 20%)
Good: 100-120% (above average)
Average: 80-100% (typical)
Below: 60-80% (needs work)
Calculate Weighted Score
Multiply each factor's score by its weight, sum all weighted scores to get total adjustment percentage.
Total Adjustment = Σ (Factor Score × Factor Weight)
Example: (130% × 30%) + (100% × 25%) + ... = 105%
Apply to Baseline
Multiply baseline valuation by total adjustment percentage to get final valuation.
Final Valuation = Baseline × Total Adjustment
Example: $2M × 105% = $2.1M
Seven Scorecard Factors
Strength of Management Team
0-30%Experience, domain expertise, previous exits, complementary skills, ability to execute
Excellent (120-150%)
Serial entrepreneurs with successful exits, deep domain expertise, complete team
Average (80-100%)
Mix of experienced and first-time founders, some gaps in team
Below (60-80%)
First-time founders, incomplete team, limited relevant experience
Size of Opportunity
0-25%Total addressable market (TAM), market growth rate, market accessibility
Excellent (120-150%)
$10B+ TAM, 20%+ annual growth, clear path to market
Average (80-100%)
$1-10B TAM, 10-20% growth, some market barriers
Below (60-80%)
<$1B TAM, stagnant market, high barriers to entry
Product/Technology
0-15%Product stage, technical feasibility, innovation, IP protection
Excellent (120-150%)
Working product, strong IP, significant innovation, proven technology
Average (80-100%)
MVP stage, some differentiation, functional prototype
Below (60-80%)
Concept stage, unproven technology, no clear differentiation
Competitive Environment
0-10%Competition intensity, market position, barriers to entry, defensibility
Excellent (120-150%)
Blue ocean, first-mover advantage, strong moats, few competitors
Average (80-100%)
Moderate competition, some differentiation, growing market
Below (60-80%)
Highly competitive, many well-funded competitors, commoditized market
Marketing/Sales Channels
0-10%Go-to-market strategy, sales pipeline, partnerships, early traction
Excellent (120-150%)
Proven channels, strong pipeline, strategic partnerships, early revenue
Average (80-100%)
Identified channels, some traction, developing partnerships
Below (60-80%)
No clear GTM strategy, no traction, no partnerships
Need for Additional Investment
0-5%Capital efficiency, runway extension, funding risk
Excellent (120-150%)
Low capital needs, long runway, clear path to next milestone
Average (80-100%)
Moderate capital needs, adequate runway
Below (60-80%)
High burn rate, short runway, uncertain funding path
Other Factors
0-5%Regulatory environment, timing, network effects, brand
Excellent (120-150%)
Favorable regulations, perfect timing, strong network effects
Average (80-100%)
Neutral environment, reasonable timing
Below (60-80%)
Regulatory headwinds, wrong timing, no network effects
Example Calculation
Baseline: $2M (US SaaS seed average)
Final Valuation: $2.11M
$2M baseline × 105.5% = $2.11M
✓ Advantages
- • More objective than Berkus Method
- • Based on real market data
- • Flexible across industries and regions
- • Widely accepted by angel investors
- • Considers multiple dimensions
⚠ Limitations
- • Requires comparable funding data
- • Subjective factor scoring
- • Market conditions affect baseline
- • Not suitable for revenue-stage
- • Needs honest self-assessment
Frequently Asked Questions
What is the Scorecard Valuation Method?
When should I use the Scorecard Method?
How do I find the baseline valuation for Scorecard?
What percentage adjustments should I use?
How accurate is the Scorecard Method?
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