What question does the investment valuation need to answer?

Clarify whether you need a view for an upcoming funding discussion, an internal planning decision or another specified use. Establish whether a figure refers to value before new investment or after it, and what rights the proposed shares would carry.

A target raise and a desired ownership percentage can imply a valuation arithmetically. That calculation does not, on its own, demonstrate that the resulting valuation is supported by the business and evidence. Separate the funding ambition from the assessment.

Build the case around evidence and assumptions

Current performance

Explain the revenue model, trading history, customer position and costs. Distinguish contracted activity from expectations.

The growth plan

Set out how the business expects to grow, the resources required and the assumptions that would have to hold.

Investment and ownership

Clarify existing and proposed interests, the use of funds and the information available about relevant transactions.

Where profitability has not yet been established, simply applying a profit multiple may not answer the question. The selected approach needs to suit the business, purpose and evidence. Uncertainty should remain visible rather than being hidden in a precise-looking number.

Understand pre-money and post-money terminology

SIMPLIFIED INVESTMENT EXAMPLE

Suppose a company agrees a £2 million pre-money equity valuation and issues new shares for £500,000 of cash investment. In a simple transaction with no other adjustments or instruments, the post-money value is £2.5 million and the new investor holds 20%.

This arithmetic assumes no option-pool change, convertible instruments, fees or different share economics. It illustrates terminology, not a recommended valuation or a predicted deal.

Actual terms can be more involved. Ask what is included in the ownership calculation and avoid comparing proposals on a headline valuation alone.

Challenge the forecast before presenting it

Connect the forecast to the way the business operates. If revenue depends on customer acquisition, delivery capacity or repeat purchases, explain the assumptions behind those drivers. Costs and funding needs should be consistent with the plan.

Consider how the outlook changes if milestones take longer or sales develop differently. The purpose is not to manufacture a pessimistic or optimistic answer, but to understand the sensitivity of the assessment to important inputs.

The business valuation methods guide explains why the choice of approach matters. A valuation engagement should state whether building or revising forecasts is included.

Prepare for the initial discussion

  • Describe the business model and current stage of trading.
  • Explain the purpose of the valuation and any planned funding discussion.
  • Identify the accounts, forecasts and supporting information available.
  • Provide context on existing ownership and any proposed investment terms.
  • Flag significant uncertainties and any real deadline.

You do not need to send documents through the website. Start with the short enquiry form, then agree the required information and an appropriate way to share it.

Scope, deliverables and fees are agreed before work begins. This service covers valuation support; it does not promise investor introductions, fundraising success or a particular transaction price.

Your questions, answered.

Can a startup be valued before it makes a profit?

A valuation can be discussed for a business that is not yet profitable. The appropriate approach depends on its stage, purpose and available evidence, and the uncertainty needs to be explained.

Does a high valuation guarantee a better investment deal?

No. Ownership, share rights and other terms also matter. Headline valuations should not be compared without understanding the assumptions and proposed structure.

Will you find investors for my business?

The service described here is valuation support. Investor sourcing, introductions and finance arrangement are not promised as part of this service.

Do I need a finished forecast before enquiring?

No. Explain what information exists and what remains uncertain. Any forecast preparation or additional modelling needs to be identified in the agreed scope.