How does my company determine a valuation?

There is no single formula for determining a company's valuation. Companies raising capital online set their own price, based on factors like previous financing rounds, comparisons to similar companies in your industry and stage, revenue achievements or projections, technology or IP advantages, team track record, and overall market conditions.

Most founders arrive at a valuation through some combination of these approaches:

• Benchmarking against comparable companies that have raised at a similar stage
• Applying a multiple to current or projected revenue
• Negotiating a number with a lead investor or existing shareholders

Valuation is ultimately a judgment call made by your company and its board, often with input from legal counsel, accountants, or advisors experienced in your sector. DealMaker doesn't set or validate your valuation. That responsibility sits with you and your team.

Early stage companies without an established revenue history often raise through a SAFE (Simple Agreement for Future Equity), a convertible note, or another form of debt rather than setting an equity valuation for the business.

Whatever approach you take, it's worth setting a valuation you can defend to investors and support in future rounds. An overly aggressive valuation now can make it harder to raise at a higher price later.