Free tool
Valuation trap simulator: does a high valuation hurt your next round?
Compare the valuation you were offered with a conservative one. The simulator projects your revenue to the next round, prices that round on a revenue multiple and shows what you own afterwards, including the effect of anti-dilution terms if the round is down.
| Metric | A · Offered $14.0M | B · Conservative $7.00M |
|---|---|---|
| Post-money today | $15.5M | $8.50M |
| You own after this round | 90.3% | 82.4% |
| Projected ARR at the next round | $949k | $949k |
| Implied next-round pre-money (ARR × multiple) | $14.2M | $14.2M |
| Round direction | Down 8.2% | Up 67.4% |
| You own after the next round | 66.7% | 60.9% |
| Today’s investor owns after the next round | 7.3% | 13.1% |
| ARR needed just to raise flat | $1.03M (330.6% growth) | $567k (136.1% growth) |
Why can a high valuation hurt founders?
A high valuation today sets the bar for the next round. If growth does not reach the implied revenue, the next round prices below today’s post-money. Down rounds trigger anti-dilution protection, scare new investors and often cost more ownership than a lower valuation today would have. Founders celebrate the headline and pay for it 18 months later.
How does the simulator price the next round?
It grows current ARR at your expected rate for the months until the next round and multiplies it by a sector revenue multiple. That is the implied pre-money. If it is below today’s post-money the round is down; the model then applies the anti-dilution clause you chose and computes everyone’s ownership after the new money.
What is the difference between weighted average and full ratchet?
Full ratchet reprices the earlier investor’s shares to the new, lower price, so founders absorb the entire difference. Broad-based weighted average adjusts the price in proportion to the size of the down round, which is the market standard and far less punishing.
What growth do you need to raise flat?
The table shows the ARR you need at the next round just to match today’s post-money. If that requires more growth than your plan, the offered valuation is a bet against your own forecast.
Questions founders ask
Which multiple should I use?
Early-stage software traded across a wide range in 2026. Use a conservative multiple for your sector and test a lower one; SeedScope’s benchmarks show where comparable startups were valued.
Does the model include option pools or SAFEs?
No. One share class and no pool top-up. The direction of the result holds; the exact numbers will differ.
What if we are pre-revenue?
Use the metric investors will price you on at the next round, for example active users times an expected revenue per user, with a matching multiple.
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The calculator shows the math. SeedScope shows the number investors will use.
Founder Starter is free, no card needed: your startup score, a risk assessment and a summary, with your profile visible to investors. Founder Pro, from $39 a month, opens the full valuation with exit odds, returns and a written analysis, refreshed every week, plus the investors matched to you by name.