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Valuation Delta Analysis: Benchmarking your valuation
Valuation Delta Analysis: Benchmarking your valuation

Tips and tricks for building a representative sample of companies for comparison, and understanding the benchmarks used.

Dan Gray avatar
Written by Dan Gray
Updated over a week ago

The VDA (Valuation Delta™ analysis) is our startup valuation benchmarking engine, which allows you to compare the key attributes of the company against a sample of similar companies. This is an add-on to our standard valuation report, extending it by five pages based on the attributes listed below.

In addition to valuation data from the Equidam platform, we also reference relevant funding rounds recorded on Crunchbase, ensuring you have access to as much data as possible.

Note: Every business is different, and 'one fit for all' cannot be applied to each business, however, benchmarking allows you to further solidify your valuation by providing context.

Filtering for benchmarks

Before you can start comparing your company against market data, the first step is to narrow that data down to the most useful and relevant sample. This is achieved with three filters:

  • Industry

Select the appropriate industry for your company. This will be the same as the industry you selected for your valuation, and so the same guidelines apply.

  • Stage

Select the stage of development you would like to compare against. Ideally, this should reflect the stage of development you have selected in the Questionnaire section, though it may need to be expanded to increase the sample size depending on the availability of data.

  • Geography

Select the region you are comparing your startup against. In most cases the continent level is probably going to yield the best result. Depending on the sample size yielded by the first two filters you may either want to narrow the data down to a country level, or expand it to look at global results.

One of the ways the platform will inform you if your sample is too small.


Here you can compare your startup's valuation with the sample of similar companies from Equidam's data. Valuations naturally vary due to the different risks and returns of the companies, so you should not aim to fit your valuation to the benchmark data. Instead, the purpose of this chart is to help you explain the rationale behind your valuation in that context.

In this chart: Each bar represents a valuation range, detailed in the labels below, with the vertical axis showing the number of companies present in that range.

Funding Round

Here you can see the percentage of shares the company offers and the capital raised compared with the other companies in Equidam's sample. A higher than average result could mean that the company is more capital intensive than its peers and vice-versa. Typical examples would be hardware or game development startups, where a lot of the cost is up front, compared to SaaS startups where more capital is raised for growth later on.

In these charts: This chart looks at averages for the percentage of equity being offered, and the amount of capital being raised by similar startups.

Funding Budget

A funding budget is a simple breakdown of how the startup plans to use the raised capital to cover expected business costs. The company is then compared to its peers to analyze similarities and differences. This isn’t going to make or break a valuation, but it is valuable feedback to understand where you might be over or underspending compared to your peers.

In this chart: The bar on the left breaks down the average allocation of funds for similar companies, while the bar on the right shows your own allocation.

Recent Similar Rounds

View the most recent equity fundraising rounds from the Crunchbase database restricted by the selected filters, including the round date, investment amount, pre-money and post-money valuations. Investors are likely to ask about similar rounds, so it’s valuable to go into negotiations armed with this information, and some understanding of why those startups - and their valuations - differ from your own proposition.

In this chart: Each bar represents the post-money valuation of a recent equity transaction by a similar company, with the grey segment representing the pre-money valuation and the green segment representing the capital raised.

Revenue and EBITDA Growth

Revenue growth and EBITDA are the two variables with the most impact on the company's valuation. This section of the VDA allows you to compare your company against the median of the sample of Equidam's data, as well as against the 25th and 75th percentile.

The EBITDA measures a company's profitability from operations. Given its significant impact in determining cash flow, it deserves special attention.

In this chart: These charts shows highlights (in grey) the range between the 25th and 7th percentile - for Revenue and EBITDA respectively, as well as a line in green representing the average, and a line in black representing your projections.

Three Year EBITDA Margin

A view on the distribution of EBITDA Margin forecasted for three years from now, sourced from the Equidam's sample. A high EBITDA might indicate an abnormally large gross profitability, which should be attributed to business differences. A significant difference between your margin and the sample might indicate a particular competitive advantage in your operation, or perhaps an unrealistic assumption.

In this chart: This chart illustrates the distribution of year 3 EBITDA margins. Each column represents a range of margin, and the vertical axis represents how many companies are in that range.

Understanding Your Sample Size

No benchmark is complete without a proper understanding of the comparable sample. The VDA also allows you to gauge the specificity of the applied filters and see how they restrict the data against which the company is compared. By clicking on Equidam's final sample, you'll be able to investigate in detail the revenue, age and FTE count of the startups included in the Equidam sample.

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