What pre-money valuation can your startup actually justify?
Founders anchor on the exit; investors price the path to it. This template rebuilds the venture capital method as a decision tree in your sheet: one big exit, two survival gates, and a required return that turns future dollars into today's valuation. Run it once and the gap between your dream number and the term sheet stops looking arbitrary.
Finance Advanced Decision Tree Pro engine
After you install, this is the model to open.
What Is the Startup Worth to an Investor?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
Click Run on the Decision Tree and the rollback prices the whole company in one pass.
- Pre-money today
- $32.9M $52.9M post minus the $20M raise
- Investor stake
- 37.8% $20M / $52.9M post-money
- Chance investors get $0
- 47.5% 30% die pre-C plus 17.5% after C
- Headline exit
- $560M 6x on $90M revenue + $20M cash
A company chasing a $560M exit supports only a $32.9M pre-money today once two survival gates and an 18% required return do their work, a 17x gap. The $20M check buys 37.8% because there is a 47.5% chance it buys nothing at all. That is not an investor lowballing you; it is the price of the failure branches. Improve the odds or shorten the timeline and the valuation responds immediately.
The model
A Series B software company raising $20M today, with a $70M Series C planned for year 2 and an exit window in year 5. Every future dollar rolls back at the 18% annual return a venture fund needs to clear.
| Strong exit, year 5 | $90M revenue x 6 multiple + $20M cash = $560M |
| Modest trade sale | $120M |
| Survives to Series C | 70% |
| Outcomes after Series C | 45% strong / 30% modest / 25% zero |
| Series C raise, year 2 | $70M, taking a 39.9% stake |
| VC required return | 18% per year |
| Series B raise today | $20M |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- When the company sells, what do you take home?Exit Payout Reality Check
- How much gross profit does each inventory dollar earn?What Does Each Dollar of Stock Earn in a Year?
- Where does a 35% hurdle rate actually come from?What Return Should a Risky Project Have to Clear?
- Which assumption is this strategic bet actually resting on?What Has to Be True: Strategic Bet Stress Test
- The headline says $12M. What is the earn-out worth?What Is the Earn-Out Actually Worth?
- Will the synergies actually cover the premium?Will the Synergies Cover the Premium?
Every model like this one, and the method behind them: Decision trees.