What is the Valuation Framework?

A framework for understanding and discussing valuation.

Who is the Valuation Framework for?

It is built for CEOs and their teams working on Fundraising. The AI coach adapts it to your company, stage, and goals.

How long does the Valuation Framework take to use?

It saves roughly 40+ hours versus building from scratch. Our AI coach can tailor the framework to your situation in minutes, then hand you a step-by-step plan.

Is the Valuation Framework free?

Yes. You can read the full framework and start getting coached through it for free. Sign in to save your tailored version and track your next steps.

How does the AI coach help with the Valuation Framework?

The coach teaches you the framework, asks a few questions about your business, tailors the framework to you, and gives you measurable next steps to execute.

Valuation Framework | Gold by MangoMagic

VALUATION PHILOSOPHY

Understanding Startup Valuation

VALUATION PHILOSOPHY

WHY VALUATION MATTERS:
☐ Determines founder ownership
☐ Sets investor expectations
☐ Affects future fundraising
☐ Impacts employee equity value
☐ Creates accountability benchmarks
☐ Defines success metrics

VALUATION PRINCIPLES:

1. VALUATION IS NEGOTIATION
   ☐ Not a science, it's an art
   ☐ Leverage determines outcome
   ☐ Competition creates leverage
   ☐ FOMO is your friend

2. GROWTH RATE IS KING
   ☐ Growth rate = multiple
   ☐ Sustainable growth > spike
   ☐ Acceleration matters
   ☐ T2D3 pattern (triple 2x, double 3x)

3. QUALITY METRICS MATTER
   ☐ NRR > 100% = premium
   ☐ Gross margin > 70% = premium
   ☐ CAC payback < 18mo = premium
   ☐ Rule of 40 = premium

4. CONTEXT IS EVERYTHING
   ☐ Market conditions
   ☐ Sector sentiment
   ☐ Comparable exits
   ☐ Public market multiples

VALUATION DRIVERS:
| Factor | Impact on Multiple |
|--------|-------------------|
| Growth rate | Primary driver |
| Market size | Ceiling setter |
| Competitive moat | Premium justifier |
| Team quality | Risk reducer |
| Unit economics | Sustainability |
| Net retention | Compounding proof |

COMPREHENSIVE VALUATION METHODS

Multiple-Based Valuation

REVENUE MULTIPLE VALUATION

═══════════════════════════════════════
CURRENT METRICS
═══════════════════════════════════════

Revenue Metrics:
Current ARR: $_____
ARR Growth Rate (YoY): ____%
Last 12 Months Revenue: $_____
Next 12 Months (NTM) Projection: $_____

Quality Metrics:
Net Revenue Retention: ____%
Gross Revenue Retention: ____%
Gross Margin: ____%
LTV:CAC Ratio: _____x
CAC Payback: ___ months

Rule of 40 Calculation:
Growth Rate + Profit Margin = ____%
☐ >40% = Premium valuation justified
☐ 20-40% = Standard valuation
☐ <20% = Discount warranted

═══════════════════════════════════════
MULTIPLE DETERMINATION
═══════════════════════════════════════

BASE MULTIPLE (Growth-Adjusted):
| ARR Growth | Base Multiple Range |
|------------|---------------------|
| <25% | 3-5x ARR |
| 25-50% | 5-8x ARR |
| 50-75% | 8-12x ARR |
| 75-100% | 12-18x ARR |
| 100-150% | 18-25x ARR |
| >150% | 25-40x+ ARR |

Your growth rate: ____%
Base multiple range: _____x - _____x

ADJUSTMENTS:
| Factor | Impact | Adjustment |
|--------|--------|------------|
| NRR > 120% | Premium | +1-2x |
| NRR < 100% | Discount | -1-2x |
| GM > 80% | Premium | +0.5-1x |
| GM < 60% | Discount | -1-2x |
| LTV:CAC > 5x | Premium | +0.5-1x |
| LTV:CAC < 3x | Discount | -1-2x |
| Market leader | Premium | +1-3x |
| Crowded market | Discount | -1-2x |
| Hot sector | Premium | +2-5x |
| Cold sector | Discount | -2-5x |

Your adjustments:
☐ _____________: +/- ___x
☐ _____________: +/- ___x
☐ _____________: +/- ___x
Total adjustment: +/- ___x

FINAL MULTIPLE RANGE:
Floor: _____x ARR
Target: _____x ARR
Stretch: _____x ARR

═══════════════════════════════════════
VALUATION CALCULATION
═══════════════════════════════════════

CURRENT ARR METHOD:
ARR × Multiple = Valuation
$_____ × _____x = $_____

NTM REVENUE METHOD:
NTM Revenue × Multiple = Valuation
$_____ × _____x = $_____

FORWARD ARR METHOD (12mo forward):
Forward ARR × Multiple = Valuation
$_____ × _____x = $_____

VALUATION RANGE:
| Method | Low | Mid | High |
|--------|-----|-----|------|
| Current ARR | $_____M | $_____M | $_____M |
| NTM Revenue | $_____M | $_____M | $_____M |
| Forward ARR | $_____M | $_____M | $_____M |

Target Pre-Money Valuation: $_____M

Comparable Company Analysis

COMPARABLE COMPANY ANALYSIS

═══════════════════════════════════════
COMPARABLE SELECTION
═══════════════════════════════════════

Selection Criteria:
☐ Similar business model
☐ Similar market/segment
☐ Similar stage/scale
☐ Recent funding (within 18 months)

PUBLIC COMPARABLES:
| Company | ARR | Growth | NRR | EV/Rev Multiple |
|---------|-----|--------|-----|-----------------|
| | $___M | ___% | ___% | _____x |
| | $___M | ___% | ___% | _____x |
| | $___M | ___% | ___% | _____x |
| | $___M | ___% | ___% | _____x |
| Average | | | | _____x |
| Median | | | | _____x |

PRIVATE COMPARABLES (Recent Rounds):
| Company | Stage | ARR | Valuation | Multiple |
|---------|-------|-----|-----------|----------|
| | | $___M | $_____M | _____x |
| | | $___M | $_____M | _____x |
| | | $___M | $_____M | _____x |
| | | $___M | $_____M | _____x |
| Average | | | | _____x |
| Median | | | | _____x |

═══════════════════════════════════════
YOUR POSITIONING VS. COMPS
═══════════════════════════════════════

| Metric | You | Comp Avg | Premium/Discount |
|--------|-----|----------|------------------|
| Growth Rate | ___% | ___% | |
| NRR | ___% | ___% | |
| Gross Margin | ___% | ___% | |
| LTV:CAC | _____x | _____x | |
| Market Position | | | |

Warranted Multiple vs. Comp Average:
☐ Higher because: _______________
☐ Similar because: _______________
☐ Lower because: _______________

IMPLIED VALUATION FROM COMPS:
Comp median multiple: _____x
Your ARR: $_____M
Implied valuation: $_____M

Adjustment for your positioning: +/-____%
Adjusted valuation: $_____M

NEGOTIATION STRATEGY

Valuation Negotiation Framework

VALUATION NEGOTIATION STRATEGY

═══════════════════════════════════════
PRE-NEGOTIATION PREPARATION
═══════════════════════════════════════

YOUR WALK-AWAY:
Minimum acceptable valuation: $_____M
Maximum acceptable dilution: ____%
Why this is the floor: _______________

YOUR TARGET:
Target valuation: $_____M
Target dilution: ____%
Why this is achievable: _______________

YOUR STRETCH:
Aspirational valuation: $_____M
What would justify it: _______________

LEVERAGE ASSESSMENT:
☐ Multiple competing term sheets
☐ Strong recent metrics
☐ FOMO-inducing momentum
☐ Reputation/track record
☐ Hot sector

Leverage score: ☐ High ☐ Medium ☐ Low

═══════════════════════════════════════
NEGOTIATION TACTICS
═══════════════════════════════════════

IF YOU HAVE LEVERAGE:
☐ Don't reveal your first number
☐ Let competition drive the price
☐ Focus on terms, not just price
☐ Create time pressure
☐ Be willing to walk away

IF YOU DON'T HAVE LEVERAGE:
☐ Anchor high but reasonable
☐ Justify with data and comps
☐ Negotiate on multiple axes
☐ Look for creative structures
☐ Consider valuation trade-offs

VALUATION TRADE-OFFS:
| Give | Get |
|------|-----|
| Lower valuation | Better terms |
| Higher valuation | Worse terms |
| Higher dilution | Stronger partner |
| Lower dilution | Less support |

CREATIVE STRUCTURES:
☐ Milestone-based valuation ratchets
☐ Anti-dilution adjustments
☐ Liquidation preference trades
☐ Board seat negotiations

═══════════════════════════════════════
ANCHORING STRATEGIES
═══════════════════════════════════════

ANCHOR HIGH APPROACH:
Start at: $_____M (stretch)
Expect to settle: $_____M (target)
Be satisfied at: $_____M (floor)

JUSTIFICATION TALKING POINTS:
1. "Based on comps like [Company], we see
   [X]x multiples for companies at our stage..."

2. "Our growth trajectory puts us on track
   for [ARR] in 12 months, which at [X]x..."

3. "Given our [metric] is top decile, we
   believe a premium multiple is justified..."

4. "We have competing interest from [signal]
   and need to move quickly at [price]..."

DILUTION ANALYSIS

Comprehensive Dilution Calculator

DILUTION MODELING

═══════════════════════════════════════
CURRENT CAP TABLE
═══════════════════════════════════════

| Shareholder | Shares | % Ownership |
|-------------|--------|-------------|
| Founder 1 | _____ | ___% |
| Founder 2 | _____ | ___% |
| Prior Investors | _____ | ___% |
| ESOP (Allocated) | _____ | ___% |
| ESOP (Unallocated) | _____ | ___% |
| **Total** | **_____** | **100%** |

═══════════════════════════════════════
ROUND TERMS
═══════════════════════════════════════

Pre-money valuation: $_____M
Raise amount: $_____M
Post-money valuation: $_____M

Option pool increase: ___% (pre-money)
Effective pre-money after pool: $_____M

Price per share calculation:
Post-money / Total shares = $_____

New shares issued:
Raise amount / Price = _____ shares

═══════════════════════════════════════
POST-ROUND CAP TABLE
═══════════════════════════════════════

| Shareholder | Pre Shares | Post Shares | Pre % | Post % | Dilution |
|-------------|------------|-------------|-------|--------|----------|
| Founder 1 | _____ | _____ | ___% | ___% | -___%pp |
| Founder 2 | _____ | _____ | ___% | ___% | -___%pp |
| Prior Investors | _____ | _____ | ___% | ___% | -___%pp |
| ESOP | _____ | _____ | ___% | ___% | +___%pp |
| New Investor | 0 | _____ | 0% | ___% | +___%pp |
| **Total** | **_____** | **_____** | **100%** | **100%** | |

═══════════════════════════════════════
DILUTION IMPACT
═══════════════════════════════════════

Founder 1:
Pre-money ownership: ____%
Post-money ownership: ____%
Dilution this round: ____%
Value pre-round: $_____M
Value post-round: $_____M

Total dilution since founding:
Starting ownership: 100%
After Seed: ____%
After Series A: ____%
After Series B: ____%
Current: ____%

═══════════════════════════════════════
OPTION POOL IMPACT
═══════════════════════════════════════

Option pool expansion: ____%

PRE-MONEY POOL (Founders bear dilution):
Pool increase: _____% → _____%
Effective dilution to founders: ____%

POST-MONEY POOL (All share dilution):
Pool increase: _____% → _____%
Shared dilution: ____%

EFFECTIVE VALUATION DIFFERENCE:
Stated pre-money: $_____M
Pool increase value: $_____M
Effective pre-money: $_____M
Difference: -$_____M (___%)

Multi-Round Dilution Model

Round	Raise	Pre-Money	Dilution	Founder %
Start	-	-	-	100%
Pre-Seed	$_____M	$_____M	___%	___%
Seed	$_____M	$_____M	___%	___%
Series A	$_____M	$_____M	___%	___%
Series B	$_____M	$_____M	___%	___%
Exit	-	$_____M	-	___%

Exit Scenario Analysis

EXIT VALUE ANALYSIS

═══════════════════════════════════════
EXIT SCENARIOS
═══════════════════════════════════════

| Scenario | Exit Value | Founder % | Founder Value |
|----------|------------|-----------|---------------|
| Downside | $_____M | ___% | $_____M |
| Base Case | $_____M | ___% | $_____M |
| Upside | $_____M | ___% | $_____M |
| Home Run | $_____M | ___% | $_____M |

LIQUIDATION PREFERENCE IMPACT:
Total preferences: $_____M
Exit value needed to clear prefs: $_____M

| Exit Value | To Investors | To Founders |
|------------|--------------|-------------|
| $_____M | $_____ (___%) | $_____ (___%) |
| $_____M | $_____ (___%) | $_____ (___%) |
| $_____M | $_____ (___%) | $_____ (___%) |
| $_____M | $_____ (___%) | $_____ (___%) |

PARTICIPATION IMPACT (if applicable):
With participation, investors receive:
Preference + (Remaining × Ownership %)
= $_____ + ($_____ × ___%) = $_____

Cap on participation: $_____

Valuation Summary

Metric	Value
Target Pre-Money	$_____M
Raise Amount	$_____M
Post-Money	$_____M
Implied Multiple	_____x ARR
Founder Dilution	___%
Post-Round Founder %	___%

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