Our experts provide SEBI-compliant startup valuations for fundraising and compliance
Understanding Startup Valuation Methods
When to Use Each Method: Revenue Multiple is ideal for startups with consistent revenue. Berkus Method works best for pre-revenue startups. Scorecard Method is useful for comparing against regional benchmarks.
Pre-Revenue vs Post-Revenue: Pre-revenue startups rely on qualitative assessments (team, idea, market). Post-revenue startups can use quantitative methods based on actual financial performance and growth metrics.
Common Mistakes: Over-relying on a single method, ignoring market conditions, not accounting for dilution, and using unrealistic growth projections are frequent errors in startup valuation.
Professional Valuation for Fundraising: Investors expect valuation backed by multiple methods. A professional valuation report strengthens your negotiating position during angel, seed, or Series A rounds.
SEBI/RBI Guidelines: SEBI-registered merchant bankers must follow prescribed valuation methodologies. RBI guidelines apply for FDI-linked startup investments under FEMA regulations.
Angel Tax - Section 56(2)(viib): If shares are issued at a premium exceeding Fair Market Value (FMV), the excess is taxed as income. DPIIT-recognised startups with turnover under Rs 100 Cr may get exemptions. Always get a proper valuation report from a registered valuer.