VC Method Calculator
Calculate startup valuation by working backward from expected exit value and investor return requirements.
What is the VC Method?
The Venture Capital Method values startups by working backward from anticipated exit value. Formula: Pre-Money Valuation = (Exit Value / ROI Multiple) - Investment
How to Calculate
Step 1: Estimate Exit Value
Project revenue at exit (year 5-7) and apply exit multiple
Exit Value = Exit Revenue × Exit Multiple
Example: $50M revenue × 5x = $250M exit
Step 2: Calculate Required ROI
VCs target 10x return in 5-7 years. Adjust for stage and risk.
Typical ROI Multiples:
Seed: 10-30x | Series A: 5-10x | Series B: 3-5x
Step 3: Calculate Post-Money
Divide exit value by ROI multiple
Post-Money = $250M ÷ 10x = $25M
Step 4: Calculate Pre-Money
Subtract investment amount
Pre-Money = $25M - $2M = $23M
Exit Multiples by Industry
High-Growth SaaS
8-12x
Revenue multiple at exit
Enterprise Software
5-8x
Revenue multiple at exit
Marketplace/Platform
3-6x
Revenue multiple at exit
✓ When to Use
- • VC-backed fundraising rounds
- • Clear exit pathway (IPO/acquisition)
- • Predictable revenue projections
- • Series A and beyond
⚠ Limitations
- • Highly speculative exit assumptions
- • Doesn't account for multiple rounds
- • Ignores market conditions changes
- • Not suitable for early pre-revenue
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