Startup Valuation Services
Data-backed Pre-money and post-money valuations for Seed to Series rounds. Defensible reports for Angel Tax compliance and VC negotiations by IBBI Registered Valuers.
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What is Startup Valuation?
Startup Valuation is the process of determining the worth of an early-stage company that often has limited historical financial data but high growth potential. Unlike mature businesses, startup value is driven by "future possibilities"- the strength of the team, the size of the addressable market (TAM), and the scalability of the technology.
At Biz Valuations, we understand that startups don't fit into traditional "spreadsheet-only" boxes. We bridge the gap between founder vision and investor reality. Our valuation reports provide a detailed narrative for your Pre-money Valuation, helping you raise capital without excessive equity dilution while staying fully compliant with Indian regulatory mandates.
Why You Need a Startup Valuation?
In the ecosystem of Venture Capital and Private Equity, a valuation report is your most critical negotiation tool. We provide specialized reports for:
Fundraising & Pitching
Justifying your Post-money Valuation to Angel Investors and VCs during Seed, Series A, and subsequent rounds.
Angel Tax Compliance
Meeting the requirements of Section 56(2)(viib) of the Income Tax Act to ensure the share premium received is not taxed as income.
Strategic Partnerships
Determining equity stakes during mergers, acquisitions, or joint ventures with larger corporate entities.
ESOP Pool Creation
Setting the exercise price for Employee Stock Option Plans to attract and retain top-tier talent.
Convertible Notes & SAFE
Valuing the "Cap" and "Discount" for convertible instruments like CCPS and CCDs.
Who Needs Startup Valuation Services?
Specialized Solutions for the Innovation Economy
Our team supports founders and investors across the entire startup lifecycle:
Key Benefits of Working with Biz Valuations
Choosing the right valuation partner can prevent "valuation shocks" during the due diligence process.
Stages We Serve
Startup valuation shifts as a company matures. We provide expertise across:
Our Valuation Methodologies
We use a hybrid of globally accepted startup valuation methods:
Discounted Cash Flow (DCF)
The primary method for "Income Tax" purposes, projecting future free cash flows.
Venture Capital (VC) Method
Working backward from an expected exit value (IPO or Acquisition) to find current value.
Berkus & Scorecard Methods
Assigning value to qualitative milestones like "Quality of Management" and "Product Risk."
Comparable Transactions
Analyzing recent funding rounds of similar startups in your sector.
Regulatory Compliance & Standards
Our startup valuations are designed to survive regulatory scrutiny:
- Income Tax Rule 11UA: Mandatory for issuing shares at a premium to avoid the "Angel Tax" trap.
- FEMA Pricing Guidelines: For startups raising money from foreign VCs or offshore holding companies.
- Companies Act, 2013: Compliance for all preferential allotments and private placement of shares.
- Ind-AS 102: Valuation of share-based payments (ESOPs) for the company’s financial audit.
Our 4-Step Startup Roadmap
1. Founder In-Depth
We discuss your business model, traction, and the specific purpose of the valuation (Tax vs. Funding).
2. Projection Review
We review your financial "pro-forma" to ensure the growth rates and margins are defensible.
3. Methodology Selection
We select the best mix of methods (DCF, Market, or Scorecard) suited for your current stage.
4. Draft & Final Report
We provide a complete report that you can confidently present to investors or the Tax Department.
Specialized Startup Services
Standard appraisals ignore the "High-Risk, High-Reward" nature of tech companies. We offer:
CCPS & CCD Valuation
Valuing hybrid instruments using the Probability Weighted Expected Return Method (PWERM).
Intangible IP Valuation
Specifically quantifying the value of your proprietary software, patents, or trade secrets.
Secondary Sale Valuation
Providing a fair value for founders or early employees looking to sell a portion of their stake.
Cap Table Impact Analysis
Modeling how new funding rounds will affect existing shareholders' percentages.
Exit Scenario Modeling
Predicting founder returns in various acquisition scenarios.
Raise Capital with Confidence.
Don't let a "guesswork" valuation kill your deal or lead to a tax notice. Get a valuation that reflects your true potential and satisfies the strictest regulators.
Partner with Biz Valuations to fuel your startup's growth.
- Built on Experience
- Trusted Across 1,600+ Projects
- Confidence of Leading Businesses
Frequently Asked Questions (FAQs)
1What is the difference between Pre-money and Post-money Valuation?
Pre-money is the value of your startup before you receive investment. Post-money is the Pre-money value plus the total amount of cash invested in the round.
2Do I need a Merchant Banker for my startup valuation?
Yes, if you are using the DCF Method to comply with Income Tax Rule 11UA (Angel Tax), the report must be issued by a SEBI-registered Category-I Merchant Banker.
3How is a "Pre-revenue" startup valued?
For pre-revenue companies, we use methods like the Berkus Method or Cost-to-Duplicate, which assign value to milestones, technology development, and team expertise.
4Does the valuation change if I have a "Liquidation Preference"?
While the Enterprise Value stays the same, the Fair Value of different classes of shares (Equity vs. Preference) will change based on the rights attached to them.
5What is 'Angel Tax'?
Angel Tax (Section 56(2)(viib)) is a tax on the capital raised by unlisted companies if the share price is higher than the Fair Market Value (FMV). A certified valuation report protects you from this.
6What documents do I need for a startup valuation?
At a minimum, we need a Pitch Deck, 5-year Financial Projections, your current Cap Table, and a copy of your MOA/AOA.
7How long does the process take?
A standard startup valuation typically takes 5 to 7 business days.
8Can you help with SAFE or Convertible Note valuation?
Yes. We value the underlying equity and apply the appropriate "Discount" or "Valuation Cap" to determine the current instrument value.
9What is TAM, SAM, and SOM?
These represent your Total Addressable Market, Serviceable Addressable Market, and Serviceable Obtainable Market. Investors use these to judge the ceiling of your valuation.
10Is a startup valuation valid for foreign investors?
Yes, but for foreign investment (FDI), the report must also comply with FEMA Pricing Guidelines, which we ensure in our reports.