How do I set a valuation for my startup when I have users but no revenue yet?

To value a startup with active users but zero revenue, you should focus on user growth metrics, market comparables, and qualitative risk factors rather than traditional financial models.

Key Steps to Set Your Valuation

If you'd like, tell me:

• What is your industry or niche (SaaS, consumer app, marketplace)?
• How many active users do you currently have and what is their growth rate?

I can help you narrow down a realistic valuation range.

Yes. If you have users but no revenue, you’re not really valuing the company on financial performance yet—you’re valuing traction, growth potential, market opportunity, and the evidence that users actually want the product.

A practical way to set the valuation

I’d approach it in this order:

1. Quantify your traction Investors will care much more about the quality of your users than the raw number.

Track:

• Total users
• Monthly/weekly active users
• User growth rate
• Retention after 30/60/90 days
• Engagement/frequency
• Organic vs. paid acquisition
• Waitlist or conversion rates
• Geographic/customer concentration
• Any evidence users would pay
• Testimonials, referrals, or unusually strong usage

For example, 10,000 registered users with 15% monthly retention is very different from 3,000 users with 70% monthly retention and 20% month-over-month growth. 2. Estimate what the company could be worth if traction continues

Since you don't have revenue, build a believable path to revenue rather than applying a revenue multiple today.

For example:

20,000 active users → 100,000 → 500,000 5% eventually pay → $X average annual revenue/user → potential $Y million revenue business The point isn't to convince investors that your forecast is guaranteed. It's to demonstrate that the current user base could plausibly become a meaningful business.

3. Compare yourself with companies at a similar stage

Look at startups that are:

• similarly early,
• in a similar market,
• at a similar funding stage,
• with comparable traction,
• and raising from similar investors.

Pre-revenue valuation methodologies commonly substitute factors such as team quality, market size, traction, and risk for traditional financial metrics. LegalClarity 4. Work backward from the dilution you are willing to accept

This is particularly useful if you're raising on a SAFE.

Suppose you want to raise $750,000 and are comfortable selling approximately 10%.

Roughly:

$750k ÷ 10% = $7.5M post-money valuation cap

That's essentially how the post-money SAFE works: investment ÷ valuation cap = ownership sold.

So instead of asking:

"What is my startup worth?" you can ask:

"How much capital do I need, and how much dilution am I willing to take?" That's often a much more useful fundraising question.

What I'd actually present to investors

Don't say:

"We're pre-revenue, but we think we're worth $10M." Instead, build the argument:

Users: 25,000 MAU: 14,000 Monthly growth: 18% 90-day retention: 52% Organic acquisition: 73% Market: $X billion Monetization: planned subscription/transaction model Current raise: $1M Target runway: 18 months Milestones: 100k users + first $X in ARR Then the valuation becomes the conclusion of the story rather than an arbitrary number.

One important distinction

If you're using a post-money SAFE, don't casually call the cap your "company valuation." A $8M post-money SAFE cap means that, for purposes of that SAFE, the investor's ownership is determined relative to that cap. For example, $800k at an $8M post-money cap represents 10% before subsequent priced-round dilution.

Also keep track of all SAFEs cumulatively. Multiple post-money SAFEs can add up surprisingly quickly: five $100k SAFEs at a $5M cap represent 10% collectively, not 2%.

If you give me your numbers

I can give you a reasonable valuation range rather than just a generic formula. Send me:

• Number of users
• Monthly active users
• Monthly user growth %
• Retention (if known)
• How long you've been live
• Industry/product
• Country/market
• Whether users are free, paid, or both
• Amount you're trying to raise
• Current founder/team background
• Any previous funding

And I can estimate something like $4M–$6M / $6M–$9M / $9M–$12M, explain what would justify each range, and show what your dilution would look like at each one.

Users: 25,000 MAU: 14,000 Monthly growth: 18% 90-day retention: 52% Organic acquisition: 73% Market: $X billion Monetization: planned subscription/transaction model Current raise: $1M Target runway: 18 months Milestones: 100k users + first $X in ARR Then the valuation becomes the conclusion of the story rather than an arbitrary number.

One important distinction

If you're using a post-money SAFE, don't casually call the cap your "company valuation." A $8M post-money SAFE cap means that, for purposes of that SAFE, the investor's ownership is determined relative to that cap. For example, $800k at an $8M post-money cap represents 10% before subsequent priced-round dilution.

Also keep track of all SAFEs cumulatively. Multiple post-money SAFEs can add up surprisingly quickly: five $100k SAFEs at a $5M cap represent 10% collectively, not 2%.

If you give me your numbers

I can give you a reasonable valuation range rather than just a generic formula. Send me:

Valuation for a pre-revenue startup with active users is all about proving traction, engagement , and future monetization potential . Since you don't have revenue to use a traditional multiple (like a multiple of ARR), investors will look at qualitative metrics and specialized early-stage valuation methods.

Here are the primary methods and metrics used to value a pre-revenue startup with users:

• User Growth and Engagement: High growth rate (e.g., month-over-month growth of 20%+) and strong engagement (daily/monthly active users, low churn, high retention) signal product-market fit.
• Market Size and Potential (TAM/SAM): The total addressable market (TAM) and serviceable addressable market (SAM) dictate the ceiling of what your startup could become if you monetize successfully.
• Team and Execution: The background, technical capability, and domain expertise of your founding team heavily de-risk the investment at this stage.
• Intellectual Property and Tech: Proprietary technology, defensible code, or unique data assets can command a higher valuation premium.
• Comparable Market Transactions: Looking at recent seed or pre-seed rounds of similar startups in your specific industry and geography.

Popular Valuation Methods for Pre-Revenue Startups

1. The Berkus Method : Assigns a monetary value (typically up to $500,000 each, maxing out around $2 million to $2.5 million total) to five key success metrics:
   • Sound idea (basic value)
   • Prototype (reducing technological risk)
   • Quality management team (reducing execution risk)
   • Strategic relationships (reducing market risk)
   • Product rollout or sales (reducing production risk—though you have users instead of sales here)
2. The Scorecard Valuation Method : Compares your startup to the average pre-revenue valuation of startups in your region, then adjusts it up or down using a weighted scorecard based on factors like team strength (30%), size of opportunity (25%), product/technology (15%), competitive environment (10%), and marketing/sales channels (10%).
3. Risk Factor Summation Method : Starts with an initial base valuation and adds or subtracts increments of $250,000 (up to ± $1 million) based on 12 distinct risk categories (e.g., management, stage of product, political, manufacturing, funding/capital risk).
4. Capital-Efficient / Traction-Based Valuation : In many hot markets, early-stage investors bypass formal formulas and price the round based on pure user velocity (e.g., valuing an app with 100,000 active users and viral growth at a flat $3 million to $5 million post-money cap via a SAFE note).

To help narrow down a realistic target valuation range, tell me:

• What is your industry or vertical (SaaS, consumer app, marketplace, fintech)?
• How many Monthly Active Users (MAUs) do you have, and what is your growth rate?
• Are you raising via a priced equity round or a convertible instrument/SAFE?

When you have users but no revenue, you are not really valuing the company on financial performance yet—you are valuing evidence that the company can become valuable. Investors usually look at traction, market size, team, product maturity, and comparable deals rather than revenue multiples.

A practical way to set a valuation:

1. Start with your stage, not your dreams

Ask where you are:

• Idea stage: Concept, research, maybe prototype
• MVP stage: Product exists and real users are testing it
• Traction stage: Users are growing, returning, referring others
• Pre-seed/seed stage: Strong evidence of product-market fit developing

A startup with 50,000 signups but weak usage may be worth less than one with 2,000 highly engaged users. Investors care about the quality of traction, not just the user count.

2. Quantify your traction

Build a traction scorecard. Include:

User growth

• Total users
• Monthly active users (MAU)
• Daily active users (DAU), if relevant
• Growth rate month-over-month
• Acquisition channels

Engagement

• Retention (especially cohort retention)
• Frequency of use
• Time spent in product
• Key actions completed

Demand signals

• Waitlist size
• Conversion from signup → active user
• Referrals
• Partnerships
• Pilot customers
• Letters of intent

For example:

“We have 25,000 registered users” is weaker than: “We have 25,000 users, 9,000 monthly active users, 45% 90-day retention, and organic growth of 20% month-over-month.”

3. Use comparable startups

Find companies at a similar stage:

• Same industry
• Similar geography
• Similar funding stage
• Similar traction

If comparable companies with similar metrics are raising at $5M–$8M valuations, that gives you a market anchor. Comparable transactions are one of the common approaches used for early-stage valuation.

4. Use a valuation framework as a sanity check

Common early-stage methods include:

• Scorecard method: Compare yourself to typical startups at your stage and adjust for team, market, product, and traction.
• Berkus method: Assign value to milestones like product, team, partnerships, and traction.
• VC method: Work backward from a possible future exit and investor return expectations.

These are not precise formulas—they help you defend a range.

5. Work backward from the raise

A simple fundraising equation:

Post-money valuation = Investment amount ÷ Investor ownership percentage

Example:

• You want to raise $1M
• You are comfortable selling 15%

Post-money valuation:

• $1M ÷ 0.15 = $6.67M

Pre-money valuation:

• $6.67M - $1M = $5.67M

Your target valuation should support the milestone you need to reach next, not just maximize today's number.

6. Create a valuation range, not a single number

A good founder usually has:

• Floor: Lowest acceptable valuation
• Target: What you believe is justified
• Stretch: What you can achieve with strong investor competition

Example:

• Floor: $4M pre-money
• Target: $6M pre-money
• Stretch: $8M pre-money

The biggest factors that increase a pre-revenue valuation

• Fast user growth
• Strong retention
• Users who repeatedly return
• Evidence of willingness to pay
• Large market opportunity
• Founder expertise
• Product defensibility
• Strategic partnerships
• Investor competition

If you share:

1. number of users,
2. monthly growth rate,
3. retention/engagement,
4. industry,
5. whether you’re raising money and how much,

I can help estimate a realistic valuation range.

Yes. If you have users but no revenue, you can still establish a credible startup valuation—but you generally shouldn't pretend the company can be valued like a revenue-generating business.

The key is to turn your user traction into evidence that future revenue and growth are plausible.

1. Start with your traction, not a revenue multiple

For a pre-revenue startup, investors will typically look at:

• Number of users
• User growth rate — e.g. 20% month-over-month
• Retention — what percentage come back after 30/90 days
• Engagement — sessions, transactions, hours, etc.
• Organic vs. paid acquisition
• Cost to acquire users, if you're spending money
• Geographic/market penetration
• Waitlist or pipeline
• Conversion signals — free → paid intent, pilots, LOIs, etc.
• Market size
• Founding team's ability to execute
• Technology/IP and competitive differentiation

Carta specifically notes that for pre-revenue companies, valuation tends to focus on the founding team, market opportunity, and traction from the early product.

2. Your users are valuable only insofar as they demonstrate something

For example:

"We have 50,000 users"

isn't nearly as compelling as:

"We have 50,000 users, growing 18% MoM, with 42% 90-day retention, and 30% of new users come organically."

The second statement gives an investor evidence that the product has product-market pull.

I'd build a simple traction dashboard with:

3. Then use comparable fundraising data as your anchor

Don't start by saying, "My startup is worth $20M."

Instead, determine the range that comparable startups are actually raising at.

Current Carta data is useful here. In Q4 2025, the median seed post-money valuation was $24M, while Carta's July 2026 data puts the recent six-month median seed valuation for software companies at $24.3M, with median dilution around 18%.

But don't automatically use $24M just because you have users. A pre-revenue startup raising a $500K pre-seed round is a very different situation from a company raising a $4M seed round with exceptional growth.

Carta's 2026 data also shows how widely early-stage SAFE caps can vary based on round size and investor demand.

4. Work backward from the amount you're raising

This is often the most practical approach.

Suppose you want to raise $1M.

If you're comfortable giving up roughly 10%, that implies:

$1M ÷ 10% = $10M post-money

If you want to give up 15%:

$1M ÷ 15% = $6.67M post-money

So instead of asking:

"What is my company worth?"

ask:

"What valuation allows me to raise enough money to hit my next milestone without unnecessarily diluting myself?"

Then test whether investors can justify that valuation based on your traction.

5. If you're using a SAFE, be careful with the terminology

A $10M SAFE valuation cap isn't necessarily saying your company is objectively worth $10M. The cap determines the maximum valuation at which the SAFE converts under its terms.

Carta explicitly cautions that SAFE caps aren't the same thing as true company valuations.

This distinction matters because you can have, for example:

$1M raised at a $10M post-money SAFE cap

without having completed a conventional priced equity valuation.

And be careful about stacking multiple SAFEs—the dilution can become surprisingly large when they eventually convert.

6. I'd build your valuation around three scenarios

For your situation, I'd calculate:

Conservative:
Low valuation justified by current traction.

Base case:
Valuation supported by your user growth + retention + market + comparable financings.

Aggressive:
Higher valuation justified if your growth/retention is exceptional and investors are competing for the round.

Then ask: what specific evidence moves you from conservative → base → aggressive?

That gives you a much stronger fundraising narrative than simply picking a number.

A useful rule of thumb

If you tell me these 7 numbers, I can actually estimate a reasonable valuation range for your startup:

1. Total users
2. Monthly active users
3. Monthly user growth %
4. 30- or 90-day retention %
5. Amount you want to raise
6. What type of startup/industry it is
7. Whether users are consumers, businesses, or both

I can then give you a low / reasonable / aggressive valuation range, plus what I'd use as the opening valuation-cap ask.

Here are top web results for exploring this topic:

Startup Fundraising·https://startupfundraising.com Valuing a Pre-Revenue Startup: The Founder's Guide (2024)How to Value a Pre-Revenue Startup: A Tactical Guide. Save. 6 min read•1,701 words• Alejandro Cremades By Alejandro Cremades•Updated 24 days ago. Your pre-revenue valuation is the most important story MassChallenge·https://masschallenge.org How to Value a Startup Company With No Revenue - MassChallenge Pre-revenue startup valuation can be a tricky endeavor. There are many things to take into consideration, from the management team and market trends to the demand for the product and the marketing ris Reddit·https://www.reddit.com How to calculate what your startup is worth even if it is pre-revenue ...How to calculate what your startup is worth even if it is pre-revenue. (Video). I will not promote. Made a short video that covers the three most common ways to put a value on your startup... and then Simply Business Valuation·https://www.simplybusinessvaluation.com Valuing a Business with No Revenue : A Guide for Startups In this comprehensive guide, we'll explain how to value a business with no revenue in a rational and defensible way. We'll cover why a startup with zero sales can still have significant value, the com LinkedIn·https://www.linkedin.com How to Value a Startup —Even When There's No Revenue - LinkedIn But the market doesn't always reward what works. It rewards what looks good. The founders raising millions aren't always the best operators. They're often the best performers. The system incentivizes ACA - Angel Capital Association·https://www.angelcapitalassociation.org Valuing Pre-revenue Companies - Angel Capital Association Valuations for pre-seed startups, regardless of the ups and downs of the venture marketplace are as level and consistent as a Tiger Woods round of golf. Oh, sure, there's the exception, but if you're Eton Venture Services·https://etonvs.com How to Value a Startup (With or Without Revenue)Startup valuation is highly context-dependent. The “right” valuation method depends on your stage, traction, available data, and use case (fundraising, 409A compliance, M&A, or strategic planning). Pr Equidam·https://www.equidam.com How to Value Pre-Revenue Startups | Equidam One of the murkiest topics within the venture capital and startup ecosystem is the valuation of pre-revenue startups. Often, the confusion stems from a misunderstanding, assuming that startup valuatio FundTQ·https://fundtq.com**Startup Valuation No Revenue** | Updated Guide - FundTQ Expand your user base or waitlist: Traction includes even free users. Emphasise team strengths: Capable founders are what investors want. Make your business plan better: Demonstrate your strategy for Alejandro Cremades·https://alejandrocremades.com Pitching A Dream: How To Value A Startup With Zero Revenue How to value a startup with zero revenue? Startups need funding to transition from the ideation phase to an actual marketable product. To raise that funding, the first step is valuing the fledgling ve

When your startup has users but no revenue, setting a valuation is less about financial math and more about measuring risk, market potential, and early traction . At this stage, standard pre-seed and seed valuations in the U.S. commonly range from $1.5 million to $5 million , heavily dictated by your team’s background, market size, and how fast your user base is growing . Instead of picking a blind number, you can use specialized early-stage frameworks or bypass a hard valuation entirely using standard fundraising instruments.

Key Valuation Frameworks for Pre-Revenue Startups

• The Berkus Method : Assigns up to $500,000 across five key success areas (sound idea, prototype, quality management team, strategic relationships, and initial rollout/users), capping the total pre-money valuation typically around $2.5 million.
• The Scorecard Method : Compares your startup to the average pre-seed/seed valuation in your region and sector, adjusting your score upward or downward based on competition, team experience, and product readiness.
• The Venture Capital (VC) Method : Works backward by estimating your company’s future exit value in 5 to 7 years, applying a required return multiple (like 10x to 30x), and discounting it back to find what the company is worth today.
• The "Reverse Engineering" Math : Many founders look at how much capital they need to raise and divide it by the target equity dilution. For example, if you need to raise $500,000 and intend to give up 20% of the company, it implies a $2.5 million post-money valuation ($2 million pre-money).

Leveraging Your User Traction

Even without revenue, an active user base acts as a primary risk-reducer for investors. To justify the higher end of a valuation range, highlight:

• Growth Velocity : How fast users are signing up week-over-week without paid marketing.
• Engagement & Retention : Metrics showing high daily/monthly active use or low churn, which signal true product-market fit.
• Conversion Intent : Free-to-trial rates, waitlists, or beta feedback proving that users find fundamental value in what you built.

An Alternative: Defer the Valuation

Setting a definitive valuation too early can backfire if you overshoot or undershoot the market. Most early-stage founders use a SAFE (Simple Agreement for Future Equity) or convertible note with a valuation cap . This allows you to accept investment now based on a maximum agreed-upon ceiling, pushing the actual equity pricing down the road to your next official priced round when revenue is active.

If you'd like, share:

• Your target raise amount
• Your monthly user growth rate or engagement metrics
• Your industry/vertical

I can help you estimate a reasonable valuation cap range or suggest the best financing instrument for your round.

If you have users but no revenue, don't try to value the company by applying a revenue multiple. At this stage, investors are mostly pricing risk, traction, market potential, and the probability that your users turn into a large business. Carta similarly notes that pre-revenue valuations lean heavily on the founding team, market opportunity, and early product traction.

A practical way to set your valuation

Think of your valuation as a range you can defend, rather than a number produced by a formula.

1. Quantify your traction

Users alone aren't enough. Put together:

• Total registered users
• Active users — especially weekly/monthly active
• User growth month-over-month
• Retention after 30/60/90 days
• Engagement/frequency
• Organic vs. paid acquisition
• Waitlist or sign-up growth
• Geographic/customer concentration
• Testimonials, partnerships, or notable customers
• Evidence users would pay, even if you aren't charging yet

For example, 50,000 signups with 5% monthly active usage is dramatically less valuable than 20,000 users with 60% monthly retention and rapid organic growth.

2. Establish what milestone this round is buying

Suppose you need $1.5M to get from:

100k users → 500k users + launch monetization + $1M ARR

That's much easier for an investor to underwrite than:

"We need $1.5M to keep building."

Your valuation should reflect how much de-risking you expect to accomplish with the money.

3. Look at comparable companies

Compare yourself with startups at the same stage, not just companies in the same industry.

Look for companies with similar:

• User traction
• Growth rate
• Business model
• Market size
• Capital raised
• Team/background
• Geographic market

Current venture valuations are unusually high at the upper end, so don't blindly use headline numbers. Carta reports a $24.3M median seed valuation for software companies in rounds from the six months ending July 2026, but that's for companies that actually made it into seed financing—not a suggested valuation for every pre-revenue startup.

4. Work backward from acceptable dilution

This is often the most useful calculation.

If you want to raise $2M and are comfortable selling roughly 15%, the implied post-money valuation is:

$2M ÷ 15% = $13.3M post-money

That means roughly $11.3M pre-money.

For 20% dilution:

$2M ÷ 20% = $10M post-money

So you'd be looking at roughly a $8M pre-money valuation.

This gives you a sensible negotiation range before you even talk to investors.

What I'd do in your situation

I'd build a one-page valuation argument around three numbers:

Current traction → growth rate → next milestone

For example:

"We have 35,000 users, growing 18% MoM, with 42% 90-day retention. We're raising $1.5M to reach 150,000 users, launch monetization, and demonstrate $500K+ ARR."

Then I'd probably enter fundraising with something like $8–12M as the target valuation/cap if the traction supports it, rather than claiming the company is objectively worth exactly $10M.

The actual number should be adjusted substantially based on your metrics and sector.

One important distinction: valuation vs. SAFE cap

If you're raising with a SAFE, you generally aren't actually establishing a formal company valuation today. You're negotiating a valuation cap, which is the ceiling at which the SAFE converts in a future financing. Carta specifically cautions that SAFE caps aren't the same thing as valuations.

That's why a pre-revenue startup with meaningful traction will often raise on a SAFE rather than spending the time and money to establish a priced equity round. Carta reports that SAFEs were the dominant pre-seed instrument in Q1 2026.

If you give me (1) number of users, (2) MAU/DAU, (3) monthly growth, (4) retention, (5) industry, (6) amount you're raising, and (7) how much you've already raised, I can calculate a defensible valuation range and suggested SAFE cap, including the dilution at each option.

If you have users but no revenue, don’t try to value the company primarily from revenue multiples. At this stage, investors are really pricing the combination of traction + market opportunity + team + product + growth potential + risk. Carta similarly notes that pre-revenue valuations focus heavily on qualitative factors such as the founding team, market size, and early product traction.

A practical way to set your valuation

Think of your valuation as a range, then use fundraising terms to determine where you land within it.

1. Quantify your traction

Users are valuable, but "10,000 users" means very different things depending on quality. I'd prepare:

• Total registered users
• Monthly/weekly active users
• Growth rate — e.g. 15% MoM
• Retention — especially 30/90-day retention
• Engagement/frequency
• Organic vs. paid acquisition
• Waitlist or conversion rates
• Geographic/customer concentration
• Evidence that users have a painful problem you're solving
• Any willingness to pay, even if you haven't monetized yet

For example, 5,000 users growing 30% month-over-month with strong retention can be substantially more compelling than 50,000 users who rarely return.

2. Estimate your "investor-implied" valuation

A useful sanity check is:

Investment ÷ desired investor ownership = post-money valuation

So if you're raising $1M and are comfortable selling approximately 10%, that's a $10M post-money valuation and roughly $9M pre-money.

Carta describes the same basic relationship: post-money valuation = pre-money valuation + new investment.

You don't necessarily need to sell exactly 10%, but this gives you a concrete starting point.

3. Compare against companies at your actual stage

Don't benchmark yourself against mature startups with millions in ARR. Look for companies that are:

• pre-revenue or barely monetized
• in a similar sector
• at a similar funding stage
• showing comparable user traction
• raising similar amounts

Current venture valuations can be surprisingly high—the median post-money seed valuation on Carta reached $24M in Q4 2025—but that's a market-wide median and absolutely does not mean a pre-revenue startup should automatically claim a $24M valuation.

A useful rough framework

I'd score the company across five dimensions:

Then ask:

"What valuation would make this investment attractive given the risk I'm asking the investor to take?"

That's more useful than asking, "What is my company technically worth?"

Don't overlook the SAFE

If you're pre-revenue and raising a pre-seed round, you may not actually need to establish a traditional priced-round valuation. A SAFE with a valuation cap is common at this stage. Carta reports that SAFEs represented 90% of pre-seed rounds on its platform in Q1 2025.

For example, you might raise:

$1M on a $10M post-money SAFE cap

That doesn't mean someone has formally appraised your company at exactly $10M. The cap establishes the maximum valuation at which that investment converts into equity, subject to the SAFE's other terms.

Be particularly careful with post-money SAFE dilution: if you sell $1M of a $10M post-money SAFE, you're effectively committing about 10% of the company to that SAFE before accounting for subsequent financing dilution. Multiple SAFEs can add up quickly.

If you give me these 7 numbers, I can estimate a sensible range

1. Number of users
2. Monthly active users
3. MoM user growth
4. Retention, if you have it
5. Industry/product
6. Amount you're trying to raise
7. How much of the company you're willing to give up

I can then give you a low / reasonable / aggressive valuation range, explain the assumptions, and show what each would mean for your dilution.

Valuation for a pre-revenue startup with active users is all about demonstrating momentum, engagement, and future monetization potential . Without historical cash flow, investors look at proxies for value—specifically how your user base translates into a future financial engine.

Here are the primary methods and factors used to value a pre-revenue, user-rich startup:

• The Berkus Method assigns a specific monetary value (up to a ceiling, usually around $500,000 per category) to five key success metrics: sound idea, prototype/technology, quality management team, strategic relationships, and product rollout/sales. Your active users act as major validation for the product rollout and idea phases.
• The Scorecard Valuation Method compares your startup to the average pre-revenue valuation of similar startups in your region and industry. You then adjust that baseline up or down based on factors like the strength of your team, size of the opportunity, competitive environment, and user growth rate.
• Comparable Transactions (Comps) looks at recent funding rounds or acquisitions of other startups in your exact niche that had similar user metrics (e.g., Daily Active Users or Monthly Active Users) at their pre-revenue stage.
• Discounted Cash Flow (DCF) with Projections is tricky without revenue, but if you have a clear monetization model (like freemium conversion rates, average revenue per user, or ad-based models), you can project future cash flows 3 to 5 years out and discount them back to present value using a high risk-adjusted discount rate (often 40%–60% for early-stage startups).
• Cost-to-Duplicate Approach calculates the exact financial cost it would take to rebuild your product from scratch, including software development hours, legal, and infrastructure costs. This usually serves as a absolute baseline or floor for your valuation rather than an exciting growth valuation.

Key Metrics Investors Care About Right Now

• User Engagement & Retention: Having 10,000 users who log in every day (high DAU/MAU ratio) is worth exponentially more than 100,000 users who downloaded the app once and uninstalled it.
• Growth Rate (MoM): Month-over-month percentage growth in user acquisition proves product-market fit.
• Acquisition Cost vs. Potential LTV: Even if you aren't charging yet, showing how cheaply you acquire users (organic vs. paid) and estimating a realistic Lifetime Value (LTV) gives investors confidence.

If you'd like to narrow this down further, tell me:

• What is your startup's industry/vertical (SaaS, consumer app, marketplace, etc.)?
• What are your current user numbers and growth rate?
• Are you raising a Priced Equity Round or a Convertible Note/SAFE?

I can help you pick the best methodology or ballpark a realistic range.