What is the Scorecard Method for startup valuation?
Short Answer
The Scorecard Method values pre-revenue startups by comparing them to similar funded companies in the region, then adjusting the median valuation based on the startup's relative strength across key factors.
Full Explanation
The Scorecard Method, popularised by venture capital practitioners, starts with data on typical median pre-money valuations for startups at the same stage in the same geography (e.g., Series A SaaS companies in London). It then adjusts this benchmark based on the startup's relative performance across multiple factors: strength and experience of the team (±30%), size of the opportunity and market (±50%), product/technology (±40%), existing customer relationships and traction (±30%), and competitive environment (±30%). Each factor is scored as a percentage (e.g., team strength is 1.2× the benchmark if above average, 0.8× if below), and the median valuation is adjusted accordingly. For example, if the London Series A SaaS median is £3M, and your team scores 1.2×, product 1.1×, and market 1.0×, your valuation might be £3M × 1.1 (average of the factors) ≈ £3.3M. The Scorecard Method requires access to comparable data, which AngelList, Crunchbase, and regional venture databases provide. It is practical and defensible but less systematic than the Berkus Method.
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