Startup Valuation (VC Method)
1486
VC Method valuation with scenario-weighted outcomes: IPO, acquisition, and failure paths. Models probability-weighted expected value like professional investors.
NOTEModel Overview
💼 VC METHOD VALUATION
Probability-weighted scenarios:
• Success (IPO/large exit)
• Moderate (Acquisition)
• Failure (Write-off)
Based on First Chicago Method
CONSTANTCurrent ARR
1000000
Annual Recurring Revenue ($)
arr
VARIABLEGrowth Rate
triangular
30-120% annual growth
growth
CONSTANTYears to Exit
5
Target exit timeline
years
NOTEExit Scenarios
📊 SCENARIO PARAMETERS
Success: 15-25x multiple (25%)
Moderate: 3-8x multiple (50%)
Failure: 0x return (25%)
VARIABLESuccess Multiple
uniform
IPO/unicorn exit multiple
success_mult
VARIABLEModerate Multiple
uniform
Acquisition exit multiple
moderate_mult
VARIABLEScenario Roll
uniform
Random draw for outcome
scenario
CONSTANTSuccess Prob
0.25
25% chance of big win
p_success
CONSTANTModerate Prob
0.5
50% chance of ok exit
p_moderate
FORMULAExit Revenue
arr * pow(1 + growth, years)
Projected ARR at exit
arr
growth
years
exit_arr
FORMULAScenario Multiple
scenario < p_success ? success_mult : (scenario < p_success + p_moderate ? moderate_mult : 0)
Picks multiple based on outcome
scenario
p_success
success_mult
p_moderate
moderate_mult
exit_mult
FORMULAExit Value
exit_arr * exit_mult
Company value at exit
exit_arr
exit_mult
exit_value
CONSTANTTarget Return
0.3
30% IRR target (VC standard)
target_return
FORMULAPresent Value
exit_value / pow(1 + target_return, years)
Discounted at VC hurdle rate
exit_value
target_return
years
pv
OUTPUTPre-Money Valuation
Valuation ($)
About the creator
The team behind Carlo. We believe everyone deserves tools to reason about risk and uncertainty.
What is Carlo?
Carlo is a visual tool for Monte Carlo simulation. Model uncertainty by dragging probability distributions, connecting them visually, and running thousands of scenarios instantly.