Seed | Series A | Series B +

Valuation
Multiples
 Q2 2023 Valuations
@Peter Walker and Carta just released their Q2 2023 valuation numbers!

Seed Series A
$13.3M $40M

Series B Series B Series B

$101M $325M $333M
Valuations Multiples?
I’ve always wondered what would happen if
I paired their valuation numbers with T2D3
to get a sense of valuation multiples by round…
But I’m going to use their Q1 2023 report since
it also includes the average time between rounds
 High Growth Case
I’m going to use Triple Triple Double Double Double as the high growth
revenue case to pair with Carta’s valuations and time between rounds.

$100M ARR $100M ARR

in 7 years in 10 years

~$10M

10% MoM 6% MoM 3% MoM

200% YoY 100% YoY 40% YoY

3x YoY 2x YoY 1.4x YoY
Medium Growth Case
But since Carta’s valuation and time between rounds use “median”
numbers I’m going to use a $1M to $100M in 10 years growth case

$100M ARR $100M ARR

in 7 years in 10 years

6% MoM 5% MoM 4% MoM 3% MoM

100% YoY 80% YoY 60% YoY 40% YoY

2x YoY 1.8x YoY 1.6x YoY 1.3x YoY
 Lower Growth Case
And I thought it’d also look at a lower growth case of $1M to $50M in 10
years and how that might look with valuation multiples

$100M ARR
in 10 years

$50M ARR
in 10 years

5% MoM 3.5% MoM

80% YoY 50% YoY

1.8x YoY 1.5x YoY
 Ending Multiple
I was curious to see how this version of multiple estimates would trend
towards with the @SaaS Capital Index for Public Company Company data
Pre/Seed
Stage
 Seed Priced Rounds
For Q1 2023 the median pre-money for US Seed rounds was $13M USD

$13M Pre-Money
 Non-Priced Rounds
Carta is using the Seed label for priced rounds only. When raising on a
SAFE or Convertible Note, the valuation cap is related to the total raise

Non-Priced Round
 Seed Multiples
Revenue at a priced seed round can vary from No Revenue (typically
based on the teams reputation) all the way up to $1M ARR. To get a
multiple range, I’m using $250K to $1M ARR here.

∞
Seed
13-50x
Seed
$13M (Pre-Money) $13M (Pre-Money)
No Revenue $250K to $1M ARR

$1M ARR
 To get multiple ranges, I’m also going to assume
that a startup hits $1M ARR within 12 months
So we can use Carta’s time between rounds + our revenue growth cases

13-50x
Seed
$13M (Pre-Money)
$250K to $1M ARR

$1M ARR

365 days
12 months
Median Case
 Median Growth Case
Since all of Carta’s valuation & time numbers are using median numbers,
we’ll use the $1M to $100M in 10 years as our median growth case.

$100M ARR
in 10 years

6% MoM 5% MoM 4% MoM 3% MoM

100% YoY 80% YoY 60% YoY 40% YoY

2x YoY 1.8x YoY 1.6x YoY 1.3x YoY
Valuations
Median US Pre-Money

Seed $13M

Series A $40M

Series B $90M

Series C $210M

Series D $332M
Time Between Rounds
Since we’re using median valuations, we’ll use median time between
primary rounds for the same time period of Q1 2023

Seed to Series A Series A to Series B Series B to Series C

23 months 24 months 24 months
 Time to Series A
Because we don’t have an exact Seed start date to measure the median
23 months to raise your Series A, I’ve used the range of zero to 12
months to get to $1M to create the valuation multiple range, which also
happens to line up nicely with $2M to $4M ARR at Series A.

$100M ARR
in 10 years

10-20x
Series A
13-50x $40M (Pre-Money)
$2M to $4M ARR
Seed
$13M (Pre-Money)
$250K to $1M ARR

678 days
23 months
Putting it all together gives us different
valuation multiple ranges for each stage…
 Median Multiples
5-6x
Series D
$332M (Pre-Money)
$52M to $71M ARR

6-9x
Series C
$210M (Pre-Money)
$22M to $34M ARR
$100M ARR
in 10 years

7-12x
Series B
$90M (Pre-Money)
$7M to $13M ARR
10-20x
Series A
13-50x $40M (Pre-Money)
$2M to $4M ARR
Seed
$13M (Pre-Money)
$250K to $1M ARR

678 days 714 days 725 days ~730 days

23 months 24 months 24 months 24 months
High
Growth Case
 High Growth Case
What happens if we keep the median valuations the same, but use the
$1M to $100M ARR in 7 years and shrink the time between rounds?

$100M ARR $100M ARR

in 7 years in 10 years

~$10M

10% MoM 6% MoM 3% MoM

200% YoY 100% YoY 40% YoY

3x YoY 2x YoY 1.4x YoY
Fast Between Rounds
Fortunately Carta has that data too! For the high growth case we’ll keep
the valuations the same - but use the 25th pct time between rounds

Seed to Series A Series A to Series B Series B to Series C

13 months 18 months 18 months
 High Growth Case
The multiples stay within range, but you get there much faster

5x
Series D
$332M (Pre-Money)
$67M ARR

8x
Series C
$210M (Pre-Money)
$25M ARR $100M ARR
in 7 years

9x
Series B
$90M (Pre-Money)
$9M ARR

20x
Series A
$40M (Pre-Money)
$2M ARR

13mo 18mo 18mo 18mo

Lower
Growth Case
 Lower Growth Case
What happens if we keep the median valuations the same, but use the
$1M to $50M ARR in 10 years and extend the time between rounds?

$100M ARR
in 10 years

$50M ARR
in 10 years

5% MoM 3.5% MoM

80% YoY 50% YoY

1.8x YoY 1.5x YoY
Slow Between Rounds
Just like before, for the lower growth case we’ll keep the valuations the
same - but use the 75th pct time between rounds this time

Seed to Series A Series A to Series B Series B to Series C

36 months 38 months 38 months
 Lower Growth Case
The multiples stay within range, but it’ll take you much longer to get there

6x
Series C
$210M (Pre-Money)
$33M ARR

8x
Series B
$90M (Pre-Money)
$10M ARR $50M ARR
12x in 10 years

Series A
$40M (Pre-Money)
$3M ARR

36mo 38mo 38mo

How does this line up with your reality?
 So To Recap
Based on this estimate it looks like the
multiples do trend towards the Public Index:

● Seed has a 13 to 50x multiple

● Series A has a 10 to 20x
● Series B has a 7 to 12x
● Series C has a 6 to 9x
● Series D has a 5 to 6x
 Michael Ho
Follow for tips on raising venture capital 🚀 | former VC & founder (acquired) + Follow

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