Pre-IPO Valuation Calculator
Sanity-check a pre-money valuation range from a revenue or earnings multiple before you take a number into a banker meeting, an underwriter call, or a term sheet. Every output here is a range, hedged for small-cap and OTC illiquidity — a conversation starter, not a fairness opinion.
Estimate a pre-money valuation range
How this is modeled
The valuation range is basis × multiple: TTM revenue × the selected revenue-multiple preset, or TTM net income × the selected P/E preset. The custom-slider point on either tab is converted to a range (±15%) so this tool never outputs a single number. Multiple presets are illustrative market-mood bands drawn from public small-cap and precedent-transaction comps as of , not a live comp set — they are not pulled from the regulatory figures in data.js because they aren't regulatory data. Checking "Apply a 15–30% OTC / thin-float discount" haircuts the low end by 30% and the high end by 15%, widening the range downward the way real illiquidity and float discounts behave. The Rule-of-40 score is simply YoY growth % + margin %; the gauge colors green at 40+, amber 20–39, red below 20. The dilution teaser divides the planned raise by (post-money valuation), using the low end of your valuation range for the high-dilution estimate and the high end for the low-dilution estimate — it is a napkin figure, not a cap-table model.
Educational estimate only — not a fairness opinion, appraisal, or offer to buy or sell securities. Real valuations are set by negotiation between a company and its investors or underwriters, informed by live comparable-company and precedent-transaction data a desk tracks in real time. Multiples move with market sentiment and interest rates; treat every number above as a starting range for a conversation, not a price.
What bankers actually look at before they apply a multiple
A revenue or earnings multiple is a shorthand, not a method. Underwriters and buy-side analysts start from the multiple because it's fast to communicate, but the number that actually moves in a real negotiation is built from the inputs behind it — and small-cap and OTC-bound companies get scrutinized on those inputs harder than large-cap comps do, because there's less trading history to smooth over the uncertainty.
Revenue quality beats revenue size
Two companies with identical $6M TTM revenue can be worth very different multiples of it. A banker will pull apart recurring versus one-time revenue, gross-versus-net reporting (a marketplace booking $50M of gross merchandise value but $6M of take-rate revenue is a $6M-revenue company, not a $50M one), customer concentration (a single customer above 15–20% of revenue is a standing objection in almost every diligence process), net revenue retention, and gross margin. A SaaS company at the low end of its multiple band with 90%+ gross margin and net revenue retention over 110% often re-rates toward the high end once a banker actually looks at the cohort data — and the reverse is just as common.
Growth durability, not a single trailing number
TTM growth captures the last twelve months; it says nothing about whether that growth is decelerating, driven by a one-time contract, or compounding on a repeatable motion. This is exactly what the Rule-of-40 gauge above is trying to proxy — a company growing 60% at break-even and a company growing 20% at a 25% margin can both clear 40, and both get a fair hearing on a growth multiple, while a company growing 15% at a 5% margin usually gets pushed toward an earnings-multiple conversation instead, which is why this tool offers both tabs.
Comparables beat formulas
The single biggest gap between this calculator and what a banking desk actually produces is the comp set. A real valuation memo starts from a curated list of publicly traded comparables and recent precedent transactions in the same sub-sector, at a similar scale, adjusts each one for growth and margin differences versus the subject company, and only then triangulates a range. This tool applies one static industry-wide band instead of a live, curated comp set — that's the entire reason the output here is a wide range and not a number, and the entire reason it's labeled a conversation starter rather than a valuation.
Why small-cap and OTC valuations trade at a discount
Two structural discounts show up consistently between a large-cap comp's multiple and what a small, thinly traded, or OTC-bound issuer actually commands. Both are why the "Apply a 15–30% OTC / thin-float discount" toggle exists above, and both are worth understanding on their own terms rather than treating the toggle as a black box.
The liquidity discount
An investor buying into a company with a deep, actively traded market can exit in minutes at a tight bid-ask spread. An investor buying into a thinly traded OTCQB name — or pre-IPO equity with no public market at all — is accepting that they may not be able to sell at a fair price on short notice, or at all, without moving the market against themselves. Academic and practitioner studies of restricted and thinly traded stock have long put this liquidity discount in the 15–35% range versus an otherwise-comparable freely tradable security, wider when average daily volume is thin or analyst coverage is nonexistent (which describes most OTCQB and many OTCQX names). That discount doesn't show up in a headline "SaaS trades at 6x" comp — it gets applied afterward, against the specific issuer's actual trading (or expected trading) characteristics.
The float discount
Related but distinct: a company can be nominally "public" while the vast majority of its shares are locked up with insiders, held under Rule 144 restrictions, or simply never traded — leaving a tiny free float relative to shares outstanding. A small float means the stock price is set by a handful of marginal trades, making it easier to move (in either direction) and harder for institutional investors to build or exit a meaningful position without price impact. Investors price this in as a separate haircut from general illiquidity, and it's a large part of why the Public Float Calculator and the uplisting checkers on this site treat float size as a first-class number rather than an afterthought — a company can clear every headline listing requirement and still trade at a float discount until real float actually develops.
A worked example
Take the calculator's default inputs: a SaaS company doing $6.0M in TTM revenue, growing 35% YoY at a 10% EBITDA margin — a Rule-of-40 score of 45, comfortably over the 40 pass line. The SaaS preset's 4.0×–8.0× revenue-multiple band produces a base range of $24.0M–$48.0M. Because this company is modeling an OTCQB-bound listing rather than a deep, liquid exchange, applying the 15–30% illiquidity discount narrows that to roughly $16.8M–$40.8M. Against a hypothetical $3.0M raise, that valuation range implies dilution of roughly 6.8% at the high end of the range and 15.2% at the low end — a real spread, and exactly the kind of gap a founder should walk into a term-sheet conversation already having modeled, rather than discovering it during negotiation.