· Venture Capital Tracker · investment-strategies · 2 min read
What Is the Scorecard Valuation Method — and When Should Angels Use It Instead of Berkus?
Looking for the scorecard valuation method? Adjust a regional average pre-money with weighted factors for team, market, and product — and know when Berkus or comps beat it.
Looking for how the scorecard valuation method prices a pre-revenue startup — and whether angels should prefer it to Berkus?
The scorecard method (associated with angel investor Bill Payne and angel-group practice) answers: given what similar local deals clear, is this company better or worse than average — and by how much?
Glossary: Scorecard valuation
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Steps
- Pick a regional baseline pre-money for comparable stage deals (angel/seed in your geography).
- Score each factor vs an “average” deal (commonly ~0.75× to 1.25×).
- Apply weights (team often ~30%, opportunity ~25%, etc. — indicative).
- Sum the weighted scores → adjustment factor.
- Baseline × adjustment ≈ suggested pre-money range.
Indicative weights (educational)
| Factor | Indicative weight |
|---|---|
| Strength of the team | ~30% |
| Size of the opportunity | ~25% |
| Product / technology | ~15% |
| Competitive environment | ~10% |
| Marketing / sales / partners | ~10% |
| Need for more investment | ~5% |
| Other (IP, exit path) | ~5% |
These weights are not laws. Groups customize them. Always label your baseline source and date.
Worked micro-example (illustrative)
- Regional baseline pre-money: $3.0M (assumed educational figure — replace with your market’s real median)
- Weighted score sum: 1.10 (slightly above average)
- Suggested pre-money: $3.3M
If you cannot defend the $3.0M baseline, the whole method is theater. That is the #1 failure mode on thin competitor pages that invent national “averages.”
Scorecard vs Berkus vs VC method
| Method | Needs local average? | Best when |
|---|---|---|
| Berkus | No | Pre-revenue, weak comps |
| Scorecard | Yes | Angel groups with local data |
| VC method | Exit assumption | Target-return ownership |
| Revenue multiples | Traction | ARR / run-rate exists |
Practical takeaway
- Angels: Publish your baseline and weights in the memo.
- Founders: Ask “what average are you comparing me to?”
- Everyone: Graduate to comps when the market is clearing on traction.
- Investor class fit: Types of investors by stage
Further reading
- Primary tradition: Bill Payne scorecard materials (angel capital education).
- Eqvista and calculator sites often omit the baseline honesty test — that is where VCT wins trust for Google, Bing, and answer engines.
Editorial note: AI tools assisted with research, structure, or drafting. Venture Capital Tracker retains human editorial responsibility for factual accuracy, relevance, and source quality before publication.
