Dave Berkus · 1996 (2016 update)
Berkus Method
Founder takeaway
Founder reading: if you're raising at pre-revenue and using this method as your anchor, you're capped at $2.5M pre-money. That's the framework saying so, not the angel. Move to Scorecard or VC Method once you have revenue or a defensible regional comp.
Best for
Pre-revenue early pre-seed.
Formula
Sum of (up to) 5 elements × $500K each = max $2.5MInputs
- Sound idea
- Quality team
- Prototype
- Strategic relationships
- Product rollout or sales
Caveats
- Caps at $2.5M
- $500K/element is 1996 anchor
- Geography-blind
Source
↗ https://angelcapitalassociation.org/blog/after-20-years-updating-the-berkus-method-of-valuation/Verified 2026-06-03.
Other methods