Early-stage valuation is a negotiation, not a calculation
Discounted cash flow models are meaningless when revenue is a rounding error. Pre-seed and seed prices are set by comparables, by how much the founder needs to reach the next milestone, and by competitive tension between investors.
Start from dilution, not from price
Decide the dilution you can afford — typically 15–22% at seed — then work backwards. If you need $2M and are willing to give 20%, your post-money is $10M and your pre-money is $8M.
Model at least two more rounds. A high seed price you cannot grow into creates a painful flat or down round later.
SAFEs, caps and the stacking trap
A post-money SAFE fixes the investor's ownership regardless of what you raise later, which means stacking several SAFEs at different caps can quietly dilute you far more than expected. Keep a live cap table that converts every instrument at the next priced round.
What raises your number
Some levers move price materially; most do not.
- Revenue quality: recurring beats one-off, net revenue retention above 110%
- Growth rate sustained over three or more quarters
- Gross margin and unit economics that improve with scale
- Defensibility: data, network effects, regulatory licence, distribution
- Competitive process: two interested leads beats a great deck
Sanity-check against the market
Ranges move with the funding cycle. Before you set a number, look at three to five recent rounds in your sector, stage and geography — then position yourself honestly within that band.