How this business valuation calculator works
This calculator chooses valuation methods based on business type and stage, then blends valid methods into a low, base, and high range. Revenue, EBITDA, SDE, DCF, and stage method outputs are all gated so the model does not pretend every method is valid for every business.
After the raw valuation is built, risk discounts and premium multipliers are applied multiplicatively, then the tool bridges enterprise value to equity value by subtracting debt and adding cash and working capital adjustments.
Core formulas
EV_revenue = Revenue × Multiple
EV_ebitda = Adjusted EBITDA × Multiple
Equity_sde = Adjusted SDE × Multiple
EV_dcf = Σ (FCF_t / (1+r)^t) + Terminal Value
Final valuation = Raw blended value × Risk multiplier × Premium multiplier
Equity value = Enterprise value − Debt + Cash ± Working capital adjustment
This engine uses stage-aware weighting, method validity gates, and capped risk and premium multipliers so the result stays interpretable instead of becoming random from stacked adjustments.
Why stage matters
An idea-stage startup should not be valued like a mature agency, and a creator business should not be forced through an EBITDA-led model if owner earnings are the real decision metric. The stage selector changes both method availability and risk treatment.
Why risk discounts are critical
Customer concentration, founder dependence, platform dependency, and revenue concentration can materially compress valuation even when revenue or profit looks strong. This page makes that haircut explicit instead of hiding it inside one opaque multiple.
Frequently Asked Questions
What is the difference between enterprise value and equity value?+
Enterprise value reflects the operating value of the business before capital structure adjustments. Equity value is what remains for owners after subtracting debt and adding cash and any working capital adjustment.
When should revenue multiples be used?+
Revenue multiples are most useful when growth is the dominant story, profitability is not yet the main lens, or the business model naturally trades on revenue, such as SaaS or some marketplaces.
When is SDE more appropriate than EBITDA?+
SDE is usually better for owner-led small businesses where owner compensation and add-backs materially affect earnings. EBITDA is more common once accounting is cleaner and management is less owner-dependent.
Why does founder dependence reduce valuation?+
Because a buyer is paying for a business, not just the current owner’s personal effort. The less transferable the core revenue engine is, the lower the valuation usually becomes.
Can a pre-revenue startup be valued with this tool?+
Yes, but it should route to stage-based valuation instead of pretending standard revenue, EBITDA, or SDE multiples are meaningful. The output is more speculative and confidence should be lower.
Why does the calculator show a range instead of one exact number?+
Because valuation is a range problem. Multiples, risk adjustments, premium factors, and DCF assumptions are all uncertain. A low, base, and high band is more honest and more useful than a fake single-point answer.
