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VC Method Valuation Calculator

Work backwards from an exit and a target return to a post-money valuation, pre-money valuation and required ownership.

Quick answer

The VC method works back from an expected exit: post-money valuation = exit value / target return multiple x (1 - expected future dilution). Pre-money = post-money - investment, and ownership = investment / post-money.

VC Method Valuation Calculator

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Used with IRR; also shows the IRR implied by a multiple.

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Share sold in later rounds before exit.

Post-money Valuation

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Pre-money Valuation

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Required Ownership Today

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Ownership at Exit

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Target Multiple / IRR

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Sensitivity to the Target Multiple

Target multiplePost-money (₹)Pre-money (₹)Ownership needed

Assumptions & method

  • Target multiple M = the multiple entered, or (1 + IRR)^years when an IRR is used.
  • Post-money = exit value ÷ M × retention, with retention = 1 − expected future dilution.
  • Pre-money = post-money − investment. Required ownership today = investment ÷ post-money.
  • Ownership at exit = required ownership × retention; it returns M × the investment at the expected exit value.
  • Not included: liquidation preferences, interim cash flows, option pool changes beyond the dilution input, and probability of failure.

Results are estimates based on the figures you enter. They are not guarantees and not financial advice.

Valuing a startup from the exit backwards

The venture capital method starts at the end. You estimate what the company could be worth at exit, decide what multiple of their money the investor must earn, and divide to find what the company can be worth today after the investment. Because later rounds will dilute the investor, the result is scaled by the share of the company they expect to keep. Subtracting the investment gives the pre-money valuation, and dividing the investment by the post-money gives the ownership the investor needs now. The method is simple and transparent, but the answer is only as reliable as the exit and return assumptions, so the sensitivity table is worth a look.

Exit value direct or revenue × multiple
Target return as multiple or IRR with years
Adjusts for expected future dilution
Post-money, pre-money and required ownership
Sensitivity to the target multiple

Frequently Asked Questions

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